The sum to be reduced will roughly be from a budget of Rs 3.43 trillion of estimated government spending in the first quarter. The cuts have become necessary because all estimates show both tax and non-tax revenue of the government will come up far short of the Budget estimates in FY21.
The government’s borrowing calendar for the first half of the year has made no provision to cover the shortfall.
The new norms allowed the expenditure monitors in each of these departments to keep track of how productively public money had been spent. In this fiscal year, the departments have finalised their expenditure plans. But now the finance ministry has issued a modified cash management plan to them, advising the cutbacks .
For this purpose, the government has divided the ministries into three groups. The first set will have to reduce their expenditure by 20 per cent, the next by 40, and the remaining by 60 per cent. It is up to the departments concerned to figure out how to make the cuts.
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