Government launches Vivad se Vishwas 2.0 scheme for dispute settlement: The Ministry of Finance’s Department of Expenditure has created the Vivad se Vishwas 2.0 scheme, also known as the Contractual problems initiative, to resolve long-standing contractual problems between the government and government undertakings.
Daily Current Affairs Quiz: August 2023
This initiative was announced during the Union Budget 2023-24 by the Union Finance Minister, Smt. Nirmala Sitharaman. The scheme aims to provide an effective and standardized mechanism for resolving contractual disputes, thereby reducing the burden on the legal system and fostering a more business-friendly environment.
An Insight into the Scheme
- Smt. Nirmala Sitharaman, the Union Finance Minister, announced the plan in the Union Budget 2023-24, emphasising its importance in settling contractual issues involving the government and its undertakings.
- Its primary goal is to establish a voluntary settlement mechanism for parties entangled in disputes where arbitral awards are being contested in court.
- Through the use of graded settlement terms that correspond to the extent of pendency of the disputes, the scheme seeks to promote amicable resolutions.
Vivad se Vishwas II: Eligibility Criteria for Settlement under the Scheme
The settlement scheme will consider cases eligible if they meet the following criteria:
- The status of the dispute must be resolved by an arbitral ruling issued before January 31, 2023.
- Alternatively, for cases resolved through court proceedings, the award must have been passed on or before April 30, 2023.
The scope of the scheme extends to all domestic contractual disputes where either the Government of India or organizations under its control are involved.
Vivad se Vishwas II: Settlement Amounts
The scheme offers attractive settlement amounts to incentivize contractors to opt for voluntary settlements. For Court Awards issued on or before April 30, 2023, the Contractor may be offered up to 85% of the net amount granted or upheld by the court. Similarly, for Arbitral Awards passed on or before 31st January 2023, the settlement amount offered can be up to 65% of the net amount awarded.
Benefits of Vivad se Vishwas II
Benefits of Vivad se Vishwas 2.0 scheme
The scheme holds several advantages for all stakeholders like:
Faster Resolution
By providing a structured and standardized settlement process, the scheme ensures faster resolution of pending contractual disputes, which otherwise could have lingered in courts for years.
Reduced Litigation Burden
The scheme aims to ease the burden on the legal system by encouraging parties to settle their disputes voluntarily, thereby reducing the workload of courts.
Business-Friendly Environment
The availability of a voluntary settlement mechanism fosters a more business-friendly environment, encouraging investment and growth in the country.
Financial Relief
Contractors will benefit from attractive settlement amounts, allowing them to recover a substantial portion of the net amount awarded or upheld by the court or arbitrator.
Vivad se Vishwas II: Accelerating Dispute Resolution with a Voluntary Settlement Mechanism
By offering a voluntary settlement mechanism with standardized terms, the government aims to expedite the resolution of pending contractual disputes involving government entities. The scheme provides contractors to get favourable settlement amounts while also reducing the burden on the legal system. With the support of digital platforms like GeM and IREPS, the scheme promises transparency and efficiency throughout the claim processing journey.
Key takeaways for competitive examinations
- First Finance Minister of Independent India: R.K Shanmukham Chetty
