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As part of its measures to limit its fiscal deficit at the budgeted 4.8 per cent of gross domestic product in 2013-14, the government on Wednesday announced an austerity drive. All ministries and departments were asked to lower their non-Plan expenditure by 10 per cent and ban creation of posts and holding of meetings in five-star hotels. Also, government officials were barred from flying executive class within the country.
The ministry also ordered all ministries and departments not to buy new vehicles or fill posts that had been lying vacant for more than a year and directed them to keep the size of delegations going abroad for official visits at “absolute minimum”.
The measures came even as the Centre’s fiscal deficit reached almost 63 per cent of the full-year Budget estimate in just the first four months of the financial year and a recent report of the Prime Minister’s Economic Advisory Council (PMEAC) said meeting the target was a challenging task. However, Economic Affairs Secretary Arvind Mayaram on Wednesday said the finance ministry would surprise all by bringing the deficit below the estimate.
The government had started going for austerity measures in 2008-09, when India, too, was affected by the global economic slowdown. The steps had last been put in place in November 2012.
“Such measures are intended at promoting fiscal discipline, without restricting the operational efficiency of the government. In the context of the current fiscal situation, there is a need to continue to rationalise expenditure and optimise available resources,” the finance ministry said in an office memorandum, released a day after Chidambaram met financial advisors of various ministries to impress upon them the need for austerity.
A finance ministry official said it was too early to say whether or not Plan expenditure would also be cut. Planning Commission Deputy Chairman Montek Singh Ahluwalia had earlier said his office would cooperate with the finance ministry.
The order added state governments were required to furnish monthly returns of Plan expenditure to the respective ministries and departments, along with reports on amounts outstanding in their public account in respect of Centrally-sponsored schemes.
TIGHT FIST
- Holding exhibitions, seminars, conferences abroad strongly discouraged
- All officers, except those in the apex scale, to travel economy class for domestic travel
- Foreign travel to be restricted to most necessary and unavoidable engagements
- Size of delegation and duration of visits to be kept at absolute minimum
