Government to Resolve Inter-Ministerial Financial Disputes Internally, Cabinet Secretary’s Decision to Be Final

New Delhi: The central government is set to introduce a new framework to resolve financial disputes between its ministries, departments, and public sector companies internally. The move aims to reduce the burden on courts, save public money, and ensure faster resolution of conflicts.

Internal Panels for Dispute Resolution
Starting from the next financial year, inter-ministerial panels will be established to handle disputes that do not involve private parties. According to officials familiar with the proposals, these panels will allow government institutions to settle disagreements without approaching the courts. A two-tiered system is being planned to ensure timely resolution of cases.

Cabinet Secretary’s Decision Will Be Final
The new framework, recently approved by the Cabinet Secretariat and shared with other ministries, provides that if the panel fails to resolve a dispute, the matter will be referred to the Cabinet Secretary. The Cabinet Secretary’s decision will be final, leaving no scope for further appeals. A senior official, speaking on condition of anonymity, said, “If disputes can be easily resolved within departments, there is no need to overcrowd courts and drag matters for months.” The arrangement is expected to strengthen accountability within ministries and departments.

Scope and Exclusions
Certain cases, such as those related to income tax, customs, and railways, will remain outside the scope of this system. The panels will operate within strict timelines: ministries must refer disputes to the panel within 30 days, and the panel will have three months to deliver a decision. The decision must then be implemented within a month. The progress of each case will be tracked online, with monthly reports submitted to the Cabinet.

Relieving Court Backlogs and Saving Public Funds
In February 2025, the Law Ministry informed the Rajya Sabha that the government is a party to nearly 700,000 pending court cases, with the Finance Ministry involved in around 200,000 of these. By resolving disputes internally, the government aims to ease the judicial burden, save taxpayers’ money, and achieve quicker outcomes. All pending cases are expected to be referred to the new system by 31 March, ensuring a streamlined approach to dispute resolution.