Central Idea

The Centre has launched the Vivad se Vishwas II scheme, a one-time settlement scheme, to effectively resolve pending contractual disputes with vendors or suppliers to the government and its undertakings.

Vivad se Vishwas II Scheme

The scheme was announced in the Union Budget 2023-24.
It aims to settle government and government undertakings’ contractual disputes wherein arbitral awards are challenged in courts.
The Vivad Se Vishwas I scheme was announced under Union Budget 2020 to reduce ongoing legal disputes under direct taxation.
Around 150,000 cases were resolved with the recovery of about 54 per cent of the amount under litigation.
The scheme was started in March 2020, and closed on March 31, 2021.

Deadline and Guidelines: The scheme sets an October 31 deadline for firms to submit their claims for consideration. The Department of Expenditure had earlier issued guidelines for its operation in late May.
Eligibility: The scheme applies to domestic contractual disputes where one of the parties is either the Government of India or an organization working under its control.
Cut-off Dates: To be considered for settlement, an arbitral award must have been secured by the aggrieved party by January 31, 2023, while the cut-off date for court orders is set at April 30.
Graded Settlement Terms: The scheme offers graded settlement terms based on the pendency level of the disputes. For cases involving court awards, the settlement amount offered to the contractor can be up to 85% of the net amount awarded or upheld by the court. For arbitral awards, the threshold is “up to” 65% of the net amount.
Processing and Registration: Eligible claims shall be processed only through the Government e-Marketplace (GeM), which has developed a dedicated web-page for implementing this scheme. For Ministry of Railways’ contractors, claims can be registered on the Indian Railways E-Procurement System.