Govt applies the brake on schemes outside the Rs 20 trillion package

The finance ministry has kept on hold the implementation of all new schemes other than those announced in the Rs 20-trillion package to revive the economy and help vulnerable sections amid the ongoing Covid-19 pandemic.

Those new schemes that were given in-principle approval would also be suspended in this financial year, said an office memorandum issued by the expenditure department. 

The finance ministry has already given interim approval for the continuation of existing schemes for 2020-21. However, this would be subject to further assessment of these programmes and a rekoning of the resource position of the exchequer, after acceptance of the recommendations of the 15th finance commission later this year. 

Earlier, the government had announced curbs on spending in the first quarter in April. First-quarter spending by most ministries and departments was restricted to 15-20 per cent. There was also a freeze on the hike in dearness allowance for government employees. 

The government had announced Rs 20-trillion package last month, but the hit to the exchequer was over Rs two trillion. 

The government has pegged its expenditure at Rs 30.4 trillion for 2020-21, which is 13 per cent higher than Rs 26.9 trillion incurred in the previous financial year.  

However, these numbers would undergo a vast change after the outbreak of coronavirus. The government has already planned to raise an additional Rs 4.2 trillion to take its borrowings to Rs 12 trillion in the current financial year.