The government will constitute an Expenditure Management Commission which will look into various aspects of expenditure reforms that need to be undertaken.
The Commission will give its interim report within this financial year, Finance Minister Arun Jaitley announced while presenting the national budget for fiscal 2014-15 Thursday.
Stressing that the government is committed to the principle of "Minimum Government, Maximum Governance", he said the time has come to review the allocative and operational efficiencies of government expenditure to achieve maximum output.
He also proposed to overhaul the subsidy regime, including food and petroleum subsidies, and make it more targeted while providing full protection to the poor and marginalized.
This, he said, was necessary to raise adequate resources for developmental needs.
"We need to introduce fiscal prudence that will lead to fiscal consolidation and discipline. We cannot leave behind a legacy of debt for our future generations. We cannot go on spending today which would be financed by taxation at a future date. There is an urgent need to generate more resources to fuel the economy," he said.