The Ministry of Home Affairs has restored the delegation of financial powers that allow the Lieutenant Governor of Ladakh and the Administrator of Chandigarh to approve developmental projects of up to Rs 100 crore. The decision reverses a move taken last month that had withdrawn these authorities and follows immediate concern in the Union Territories affected.
Ladakh financial powers restored under DFPRs 2024
The order, issued on Friday, applies to Union Territories without legislatures and explicitly names Ladakh, Chandigarh, the Andaman and Nicobar Islands, Dadra and Nagar Haveli and Daman and Diu, and Lakshadweep. The competent authority approved the delegation under the Delegation of Financial Powers Rules 2024, enabling Administrators and Lieutenant Governors to sanction projects up to the Rs 100 crore threshold.
Under the fresh instructions the L-G or Administrator must exercise the delegated powers in consultation with the Secretary Finance or an equivalent financial adviser of the respective territory. Any use of the power is subject to the availability of adequate budgetary provision. The ministry has underscored that these powers cannot be further re-delegated.
The restoration comes nearly a month after the Home Ministry withdrew the Ladakh Lieutenant Governor’s authority to sanction schemes and projects costing up to Rs 100 crore, and curtailed administrative secretaries’ approval limits to Rs 20 crore. That earlier step had prompted concern among local administrators and stakeholders who warned of potential delays to planned development work.
The MHA has also directed that details of all projects approved under the delegated powers must be furnished to the Department of Expenditure through the Home Ministry on a quarterly basis. This reporting requirement aims to preserve oversight and ensure alignment with central fiscal rules and existing Ministry of Finance guidelines.
In addition to the delegated powers, the order clarifies that the L-G’s authority to sanction expenditure on schemes from in‑principle approval to final approval will continue under Rule 16 of the DFPRs 2024. However, such sanctioning will be permitted only after appraisal and clearance by competent authorities in line with the finance ministry’s procedures.
Officials said the move seeks to strike a balance between administrative efficiency and financial oversight. Restoring the authority allows territorial leaders to clear projects more rapidly, reducing procedural delays that can stall infrastructure, health and education initiatives. At the same time the requirement for consultation with finance officers and quarterly reporting preserves checks and accountability.
Observers noted that timely decisions on project approvals are critical for territories with limited administrative capacity and remote geographies. For Ladakh, which faces unique development challenges owing to terrain and weather, the ability to sanction larger projects locally could accelerate delivery of essential works.
The Home Ministry order does not permit re‑delegation of the restored powers, keeping final responsibility with the L-G or Administrator. Officials will monitor the rollout and the quarterly returns to the Department of Expenditure will provide a record of approvals and budgetary usage.
For now the reversal is likely to calm concerns in the affected territories and enable a return to previously authorised workflows for developmental spending. Central authorities will continue to require scheme appraisal and clearance, preserving procedural safeguards while restoring local decision making for projects up to Rs 100 crore.
Key Takeaways:
- Ministry of Home Affairs restores delegation allowing approval of developmental projects up to Rs 100 crore, including Ladakh financial powers.
- Change covers Ladakh, Chandigarh, Andaman and Nicobar Islands, Dadra and Nagar Haveli and Daman and Diu, and Lakshadweep.
- Powers must be exercised with the Secretary Finance or equivalent adviser and cannot be re-delegated.
- All approvals must be reported quarterly to the Department of Expenditure for transparency.
