FMs austerity drive: no meetings in five-star hotels,limited foreign travel

It said the steps were necessary to carry on the process of fiscal consolidation vigorously and to meet the fiscal and revenue deficit targets announced in the Budget for 2011-12.

The directive said that new vehicles can be bought only for operational requirements of defence and paramilitary forces and other organisations involved in security operations.

The ministry has also called for a ban on creation of Plan and non-Plan posts except for new organisations. Consultants should be engaged only for high quality services for which the concerned ministry/ department does not have requisite expertise.

Calling for greater accounting of funds,the ministry has said that no money should be released to any entity which has defaulted in furnishing utilisation certifications for grants-in-aid released by the central government without its prior approval.

The state governments are required to furnish monthly returns of Plan expenditure central,centrally-sponsored or state plan to respective ministries/ departments along with a report of amounts outstanding in their public account of central and centrally sponsored schemes, it said.

The ministries and departments have been asked to submit an overall report on compliance on a quarterly basis.

Meanwhile,public policy experts as well as government sources said the steps that were announced were unlikely to save the exchequer more than a few hundred crores of rupees.

Such austerity measures will serve little in reining in the fiscal deficit but are more symbolic in nature, said D K Srivastava,director,Madras School of Economics. The deficit for 2011-12 is estimated at 4.6 per cent of the GDP,but economists expect it to exceed 5 per cent.