Gearing up for the tough times ahead,the finance ministry on Thursday announced a slew of austerity measures aimed at snipping off frivolous spends by government departments. Accordingly,the department of expenditure has shot off a strict memo to administrative ministries banning them from holding meetings in five star hotels and restricting foreign travel.
However,government officials have not been directed to travel by economy class,perhaps after the controversy such an advisory had raked up in 2009 when MoS for External Affairs Shashi Tharoor termed it cattle class. In the context of the current fiscal situation where there is a tremendous pressure on government resources,there is an urgent need for rationalisation of expenditure and optimisation of available resources with a view to improve the macroeconomic environment, Sumit Bose,expenditure secretary wrote in the guidelines.
The measures,aimed at bringing down non-plan expenditure by 10 per cent during the current fiscal,were announced on a day when the countrys growth rate declined to a nine-year low of 6.5 per cent and the fiscal deficit touched 5.7 per cent of the GDP against the target of 4.6 per cent.
The ministry has also banned purchase of vehicles and creation of new posts. It has said that the Centre will also observe discipline in fiscal transfers to state,PSUs and autonomous bodies. Secretary and financial adviser of each department will be responsible for ensuring compliance of the austerity drive.
The ministry has also said that rush of expenditure on procurement should be avoided during the last quarter of the fiscal and,in particular,the last month of the year so as to ensure that all procedures are complied with and there is no infructuous or wasteful expenditure.
Finance minister Pranab Mukherjee had earlier hinted that the government would resort to unpopular austerity measures to deal with fiscal problems. I am going to issue some austerity measures…, he had informed the Parliament. Similar guidelines were also issued in 2009 and 2011.
* Department of expenditure has banned ministries from holding meetings in five star hotels and restricting foreign travel
* Finance ministry has also banned purchase of new vehicles and creation of new posts
* Centre will observe discipline in fiscal transfers to state,PSU and autonomous bodies