In a bid to give a boost to the economy and revive the construction sector of the country, the government has directed all the ministries and the departments to clear the pending payments of contractors and construction companies quickly. The notice came with the objective of infusing liquidity and creating job opportunities in the market.
In the past few years, many multi-crore infrastructures and construction projects got stuck in the legal issues and court proceedings thereby impacting the growth of the most promising business sector of the country. The sector which employs the majority of people directly or indirectly, is still entangled in certain legal hassles even after Cabinet Committee on Economic Affairs (CCEA) approval of various measures to infuse liquidity in the construction market.
Recently, Niti Aayog’s Project Management and Appraisal Division (PAMD) issued a letter directing the Union Law Ministry and other concerned departments to ensure that all the contractors are paid 75 per cent of arbitral awards towards the bank guarantee. Furthermore, the letter also says that the Attorney General of India along with the consultation of the department of legal affairs will make sure that the process of lending legal opinion relating to payment issues to Government entities will be completed in 30 days.