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Finance Ministry Comes out With Austerity Measures to Rationalise Non-priority Expenditure

A file photo of the ministry of finance, New Delhi.

A file photo of the ministry of finance, New Delhi.

The government’s economic report this month points out the need to invest in key sectors like agriculture, development and infrastructural projects to spur growth.

As the government battles an economic crisis and the impact of the coronavirus pandemic, it has now decided to cut corners and costs. The government’s economic report this month points out the need to invest in key sectors like agriculture, development and infrastructural projects to spur growth.

Sources say it was at the Prime Minister's instance that the Ministry of Finance decided to cut costs. This is also to ensure that the resources are channelised to investment in these key sectors.

The ministry has issued the instructions on expenditure management with a view to improving the quality of public expenditure, containing non-developmental spending and ensuring availability of adequate resources for critical priority schemes, the Department of Expenditure said.

A ministry release said, “In the context of the present fiscal situation and the consequent pressure on government resources, there is a need for further economy and rationalization of non-priority expenditure, while protecting and preserving priority expenditure."

The ministry has decided to cut costs with immediate effect in the following areas:

a.) No printing/publishing of books, publications, documents, etc will be done on imported paper, except where printing is done abroad by Indian Missions.

b.) Expenditure on functions such as celebrations of Foundation Day should be discouraged or if felt necessary be appropriately curtailed. In any case, travel for such functions and provision of bags or mementos should be avoided.

c.) Consultancy assignments: All ministries/departments may carry out a review of the individual consultants appointed in their respective ministries/departments.

The ministry has also banned the creation of new posts, except with the approval of Department of Expenditure, in ministries/departments, attached offices, subordinate offices, statutory and autonomous bodies.

This ban will cover the creation of all posts under powers delegated to any organisation regardless of the source of such authority or power. Posts created after July, without approval of Department of Expenditure and not yet been filled, will not be filled. If it is deemed absolutely essential to fill them, proposals may be sent for approval to the Department of Expenditure.

Earlier this week, the ministry had asked ministries/departments/PSUs and public sector banks not to print calendars, diaries, greeting cards and schedulers in physical format henceforth. It also banned printing of coffee-table books and instead encouraged use of e-books.

A ministry source said it hopes to increase investment in important sectors by at least 25%, with these measures in place.

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