In a significant move that ends months of bureaucratic limbo, the Chandigarh administration has regained its financial independence. The central government has officially restored the power of the Union Territory's administrator to approve new development projects valued at up to Rs 100 crore, a crucial authority that had been withdrawn last year.
Restoration of Delegated Financial Powers
The Ministry of Home Affairs (MHA) issued a formal letter to the Chandigarh administrator, delegating the authority to sanction expenditure for schemes up to the Rs 100 crore threshold. This power spans the entire project lifecycle, from in-principle approval to final approval, including the appraisal stage.
This new order effectively supersedes the previous directive from September 19, 2025, which had centralized approval powers with the MHA. The restoration comes after explicit approval from the Department of Expenditure under the Ministry of Finance. The delegation applies not just to Chandigarh but to all Union Territories without a legislature, including Andaman and Nicobar Islands, Ladakh, Lakshadweep, and Dadra and Nagar Haveli and Daman and Diu.
Key Conditions and Reporting Mandates
While the move grants substantial autonomy, the MHA has laid down specific conditions to ensure oversight. The Administrator or Lieutenant Governor must exercise these powers in consultation with the Secretary (Finance) or equivalent Financial Advisor of their respective UT.
Furthermore, the delegated powers cannot be re-delegated to any other authority, and their use is contingent on adequate budgetary provisions being available. Crucially, the UTs are required to submit a detailed quarterly report to the Department of Expenditure, via the MHA. These reports, detailing all proposals approved under the new powers, are due by the end of July, October, January, and April each year.
Background: The Withdrawal and Its Impact
The context of this restoration lies in a decision from September last year, when the central government tightened financial control. It had directed that all schemes, administrative works, and expenditure sanctions above Rs 1.5 crore would require prior approval from the MHA. A subsequent order on September 19 explicitly withdrew the powers of appraisal and approval for publicly funded projects from the administrators of UTs without legislatures.
This had created significant uncertainty and potential delays for new initiatives in Chandigarh. However, clarifications issued by the MHA and the UT Administrator in October and November last year assured that ongoing projects would not be impacted by the earlier order, though all new proposals still had to be routed through the ministry.
The latest order, by reinstating financial powers under Rule 16 of the Delegation of Financial Power Rules (DFPRs), 2024, is expected to streamline administrative processes and accelerate the launch of new development work in Chandigarh and other similarly placed Union Territories.
