New Delhi : It is hereby notified that, henceforth at the time of signing of MoU for a project under Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY), including Roshini, Himayat and Sagar Mala projects, a Project Implementation Agency (PIA) shall have to provide a Performance Guarantee from Bank for a minimum value of 6.25% of the total cost of the project or for any such higher value as prescribed by the State Government for a project in the state. The PIA shall ensure that the Performance Guarantee from the bank shall be valid for a period starting on / before the date of MoU signing till One Hundred Eighty (180) days after the end of approved duration of the project. The Performance Guarantee shall be irrevocable and unconditional. Any type of Government funds which have been given to a PIA for a DDU-GKY project cannot be used as a margin / collateral for Performance Guarantee. Any cost relating to Performance Guarantee from a bank will have to be borne by PIA.
Ministry has introduced Performance Guarantee for DDU-GKY projects with an objective to ensure an assurance to the Government in the event of inadequate or delayed performance or a violation of Guidelines and protocols by a PIA in a a DDU-GKY Project. While a bank may not be required to ensure performance by a PIA, a Performance Guarantee from bank merely guarantees that if the Project Implementation Agency (PIA) fails to perform bank will be liable to pay the agreed guarantee money to the state. In assessment of PIAs performance the decision of State Rural Livelihoods Mission / State Skills Development Mission shall be the final decision for invoking a Performance Guarantee. However, state shall be required to issue a notice to the PIA and providing for a hearing to the PIA before such a decision is taken by the State Rural Livelihoods Mission / State Skills Development Mission.
Note : Above information is based on Notification No. 50/2017 issued by S B Tiwari, Under Secretary, Government of India, Ministry of Rural Development (Rural Skills Division). To view original copy of notification, Click Here