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F.No.1/30/03-PMU
Ministry of Finance
Department of Economic Affairs
North Block
New Delhi - 110 001

Dated, the 1st October, 2003

SUBJECT: GUIDELINES FOR FUTURE DEVELOPMENT COOPERATION WITH BILATERAL PARTNERS


Kindly find attached a copy of the latest guidelines for future development cooperation with bilateral partners for information and further necessary action.


Sd/-
(V.Vumlunmang)
Deputy Secretary (J&PMU)

To
1. Secretaries in all concerned Central Ministries
2. Chief Secretaries of all States

The Chief Secretary
Govt. of Madhya Pradesh
Secretariat, Ballabh Bhavan
Bhopal.


 
GUIDELINES FOR FUTURE DEVELOPMENT CO-OPERATION WITH BILATERAL PARTNERS

1. The Government of India has decided to reorient the flow of assistance from bilateral partners and to set up a mechanism to streamline it. It has also been decided that except as provided in these guidelines, bilateral assistance (including grants) will not be availed by the Government and, its subordinate and attached agencies (societies, trusts, boards, companies, corporations, parastatals, etc.) where Government has substantial control.
 
2. In order to facilitate implementation of these decisions, the following guidelines shall apply:
 
'Ongoing' Programmes and projects
 
3. Funding of 'ongoing' programmes and projects will continue until their completion. An 'ongoing' programme/project would mean a programme/ project for which a formal agreement or protocol has been signed, by or with the concurrence of the Department of Economic Affairs, even though the actual implementation may not have started.
 
4. In respect of these project where the bilateral partner had taken irreversible steps towards approval of assistance flows, although no formal agreement or protocol had been signed, a flexible case-by-case approach will be followed by the concerned credit division or Department of Economic Affairs.
 
5. If a bilateral partner wishes to discontinue assistance to a project, such a decision will be accepted and the outstanding loan repaid.
 
Circumstances in which bilateral assistance can be received by Government
 
6. The Government and its subordinate and attached agencies can continue to receive fresh bilateral assistance in the following circumstances:
(a) Where the bilateral assistance is provided by Japan, Germany, USA, 'EC' and the Russian Federation.
(b) Where the assistance is routed through or co-financed with a multilateral agency and the proposed programme/project is to be implemented by the multilateral agency under its own rules and procedures. Such arrangements should be evolved between the participating multilateral and bilateral as part of their policies. Such co-financed programmes or projects would be governed by the procedures applicable to the multilateral agency spearheading the programmes/ projects.
(c) Where the bilateral assistance is for Technical Assistance programmes that aim at enhancement of knowledge/ skills of Indian nationals.
 
Areas where bilateral assistance will be welcome  

7. Bilateral assistance from countries other than those mentioned in article 6(a) will be directed towards projects of economic and social importance only. Such assistance may be made available directly to Universities, Non-Government Organisations, autonomous bodies, etc. However, autonomous bodies which are largely/ fully funded by the government like ICAR, CSIR and such others would not be permitted to avail of bilateral funds.
 
8. Bilateral assistance to these organisations will be governed by the Foreign Contribution (Regulation) Act, 1976 and only such organisations that are registered under the FC(R) Act, 1976 may received bilateral assistance. Organisations that are not registered under the FC(R) Act should get permission from the appropriate authority under the Act.
 
9. Bilateral and Multilateral Partners that are exempt under Section 2(1)(e)(ii) of the FC(R) Act, 1976 may also restrict their assistance to organisations that are registered under the Act or are permitted to receive contributions under the Act.
 
The New Procedure
 
10. For the assistance described in article 7 of these guidelines, Bilateral partners may identify the recipient organisations and projects on their own. They may submit, twice every year in the months of March and September, a list of organisations they wish to assist, together with a brief description of the programme/ project, to the Joint Secretary concerned in the Department of Economic Affairs, in the Proforma-I attached to these guidelines.
 
11. After examining the list provided, the concerned officials of Government of India would convene a meeting with a bilateral partner, wherein; DEA's response on the various proposals would be conveyed. The partner is expected to suitably modify the list, in light of the suggestions of DEA.
 
12. Once the list of recipients/programmes/projects are approved, the bilateral may transfer funds directly to the accounts of the recipient organisations. The bilateral partners may also make their own arrangements for monitoring the physical and financial progress of these projects.
 
13. Twice a year, in the month of April and September, the bilateral partners may provide information to the DEA in the Proforma-II attached to these guidelines, the extents of funds transferred to the recipient organisations and the status of the project.

PROFORMA - I


 
New Organisations proposed to be funded
 
Year:

Month:
 
External Funding Agency:

Country of Origin:

No
Name of Organisation
Status of FCRA Clearance
Name & brief Description of Project
Project Duration (Months)
Project outlay (Rs. in lakhs)
1

External funding agency
Recipient
Total
2
(Yes/No)
3
4

PROFORMA - II
 
New Organisations proposed to be funded
 
Year:

Month:
 
External Funding Agency:

Country of Origin:

SNo
Name of Organisation
Name of Project
Date Started
Project Duration (Months)
Project Expenditure
Status (Ongoing/ completed/ Terminated)
Outlay
Expenditure