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News: Recent guidelines by the central government have asked its arms, including state-run firms to avoid appeal against every arbitration award, especially in the cases that have a low probability of success.
These guidelines are released to avoid project delays.
What are the implications of these project delays?
Project delays and cost overruns cause a lot of harm to the exchequer.
Government has to at the end pay a huge amount in the form of compensation and interest costs.
This also negatively affects the image of government.
What have been recent other government initiatives to avoid project delays?
The latest guidelines have removed several hurdles in project management from conceptualization of a project to land acquisition and award of a contract.
Budget 2021-22 enhanced capital expenditure by 34.5% to ₹5.54 trillion.
The ₹111 trillion National Infrastructure Pipeline (NIP) is also expected to boost growth.
What is the way forward?
As Public expenditure is key to accelerating growth and creating jobs(multiplier effect), it is important that projects get completed on time.
Both the parties in the dispute should be encouraged to resolve the issue through disputes through discussion and mediation instead of resorting to legal recourse.
Source- This post is based on the article “Challenge arbitration awards carefully” published in Live Mint on 17th Jan 2022.
