In order to undertake the techno-economic appraisal of major projects and programmes in the public sector for facilitating the investment decision by the Government, a separate Division known as 'Project Appraisal Division' was set up in the Planning Commission in 1972.
It was reconstituted as Project Appraisal and Management Division (PAMD) on 6th January, 1994. The PAMD undertakes appraisal of Central Sector projects and schemes in consultation with the subject divisions of the Planning Commission before these are considered for investment approval/decision by the Public Investment Board or Expenditure Finance Committee depending upon the size and nature of project cost. Presently, all the Central Sector Projects / Schemes costing Rs.100 crore or more are appraised by this Division. Projects of Ministry of Railways costing Rs.300 crore and above are appraised by PAMD.
The appraisal by PAMD broadly includes need and justification for the project/scheme, linkages with the Plan, Demand Supply, Technical Feasibility, Organisational, Managerial and Financial capabilities of Project Authorities, reliability of cost estimates, financial and economic viability etc. of the projects/schemes. Besides, new proposals, the proposals of the revised cost estimates are also appraised by PAMD.