In an austerity move, the Union government has decided to reduce wasteful expenditure on items such as travel and food by 20 percent, it is learnt.
A decision of this effect was taken at a recent meeting of the Cabinet Committee on Investment and Growth (CCIG), chaired by Prime Minister Narendra Modi, according to sources.
“All ministries have been directed to reduce wasteful expenditure on travel, food and conferences by 20 percent. The CCIG has asked the Department of Expenditure, Ministry of Finance, to take necessary action in this regard,” a source told The Sunday Express.
The minutes of the CCIG meeting were circulated last week to the ministries concerned for follow-up action, the source said.
The move is being seen as the Centre’s attempt to avoid fiscal slippage by containing non-development expenditure and controlling fiscal deficit well within the limit of budgeted target of 3.3 percent during 2019-20 financial year. With the GDP growth expected to slow down to an 11-year low of 5 per cent during the ongoing fiscal, the task of maintaining fiscal discipline becomes more challenging.
This is not the first time that the government has resorted to austerity measures for rationalisation of expenditure. In October 2014, the Department of Expenditure had asked other departments to cut non-Plan expenditure by 10 per cent. It had also asked them to observe economy in organisation of exhibitions, fairs, seminars and conferences, as also to reduce expenditure on purchase of vehicle and domestic and international travels.
An order issued by then Secretary (Expenditure) Ratan P Watal on October 29, 2014, had stated: “Such [austerity] measures are intended at promoting fiscal discipline, without restricting the operational efficiency of the Government. In the context of the current fiscal situation, there is a need to continue to rationalise expenditure and optimise available resources.”
Constituted in June last year, the CCIG includes Defence Minister Rajnath Singh, Home Minister Amit Shah, Road Transport and Highways Minister Nitin Gadkari, Finance Minister Nirmala Sitharaman and Railways Minister Piyush Goyal as members.
The CCIG, which met first time in the last week of December 2019, also decided on a dozen other actionable points, including review of the Foreign Direct Investment (FDI) policy and identification of infrastructure projects for Rs 100 lakh crore investment programme announced by the Prime Minister in last year’s Independence Day speech.
While Sitharaman has unveiled Rs 102 lakh crore infrastructure projects to be taken up in next five years, some other actionable measures are yet to be announced.