The finance ministry has instructed all the ministries and departments to ensure better fiscal and expenditure management while forwarding additional outlays in supplementary demands for 2011-12 to be tabled in the monsoon session of Parliament.
The instructions come amid reports that the government’s revenues may suffer a hit as economic growth is not expected to be so strong as was initially projected at nine per cent for this financial year by the Economic Survey of 2010-11. Meanwhile, Finance Minister Pranab Mukherjee told parliamentarians there was a significant scope to reform the expenditure policy of the government for rationalisation of public spending.
“Steps or measures to be taken for better fiscal and expenditure management for 2011-12....may kindly be forwarded strictly,” the Budget division of the ministry wrote to all financial advisors attached with various ministries.
It said no proposal for cash supplementary be forwarded to this ministry during the current financial year, except in absolutely unavoidable cases or other proposals, which relate to the Budget announcements of the current financial year.
“Even in such cases, the effort should be to identify matching savings within the ministry or department,” the instructions said.
A finance ministry official said the current year being the terminal year of the Eleventh Five-Year Plan, no fresh schemes are going to be announced. “Any fresh scheme will now come in the Twelfth Five-Year Plan.”
Meanwhile, Mukherjee told consultative committee attached with his ministry government efforts were on track to get economy on a path of fiscal prudence.
There is a need for regular monitoring and evaluation of public expenditure, Mukherjee told his fellow members of Parliament.
He said the success of fiscal policy was closely tied with optimal utilisation of public resources.
The finance minister said numerous factors made expenditure reforms an extremely challenging and uphill task.
The Centre has pegged its expenditure at Rs 12,57,729 crore for the current financial year and revenues at Rs 8,44912 crore, which would leave fiscal deficit of Rs 4,12,817 crore representing 4.6 per cent of expected GDP.
