The Narendra Modi government recently unveiled a never before austerity drive in a bid to control non-planned expenditure by at least 10 per cent this fiscal. The government imposed a ban on the first class traveling of Indian bureaucrats on overseas trips. The government also suggested them to use video conferencing for the purpose, instead of taking frequent trips.
The Finance Ministry aims to contain the fiscal deficit to 4.1 per cent of GDP in the current year. The officials have been told to refrain from convening meetings in five-star hotels and a put a restriction on new appointments and filling up posts that have been vacant for more than one year.
The office memorandumsaid, “While officers are entitled to various classes of air travel depending on seniority, utmost economy would need to be observed while exercising the choice keeping the limitations of budget in mind. However, there would no bookings in the first class.”
It also said that Video Conferencing facility might be used effectively in this regard. Moreover, the Ministry document said that procurement of new vehicles to meet the operational requirements of security organisations, defence forces and paramilitary forces is allowed, but there’s definitely a ban on purchasing any other vehicles.
“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,” said the Finance Ministry.
By 2016-17, the Centre aspires to lessen the fiscal deficit to 3 per cent of GDP. The deficit figure had rocketed to 5.7 per cent in 2011-12, but was plunged down to 4.8 per cent in 2012-13, before further plummeting to 4.5 per cent in 2013-14, by employing austerity measures.
In his budget speech, Arun Jaitley, the Finance Minister, had said, “The task before me is very challenging because we need to revive growth, particularly in manufacturing sector and infrastructure.”
He had also said that the choice remained with the government to either be victims of wasteful expenditure and mere populism or cut down on the unwanted expenses.
The obligatory 10 per cent cut in the planned expenditure will not include repayment of debt, salaries, capital, defence, interest payments, pensions and grants to the state, explained the Finance Ministry. It said “No re-appropriation of funds to augment the non-plan heads of expenditure on which cuts have been imposed, shall be allowed during the current fiscal.”
The Ministry also made it clear that the austerity measures would be equally applicable to autonomous bodies, and added that no new commitments would be promised over and above those already declared in the Budget.
The government said, “Holding of exhibitions/seminars/conferences abroad is strongly discouraged except in case of exhibitions for trade promotions.” And further added that only those conferences and seminars which are totally indispensable would be arranged.
The ministry said in clear terms that the lowest air fare tickets available would be used in case of air travel for the entitled class “No companion free ticket on domestic/international travel is to be availed of,” it then said.
Talking about the government department jobs, the ministry said that there will remain an absolute ban on new posts and those which have stayed empty for over a year are not to be filled except “under very rare and unavoidable circumstances”.
It asked all departments to steer clear of clustering up expenditure in the last quarter to make sure that no wasteful or infructuous spending takes place.
The Secretaries have been assigned the job to make sure that the austerity measures are strictly adhered to and the Financial Advisors have been given the responsibility to give reports Finance Ministry on a quarterly basis.
Outlay on subsidies, payment, salary, interest, etc., come under the preview of the non-plan expenditure of government.
As per reports:
For the current fiscal, the government has proposed a Plan expenditure of Rs 5.75 lakh crore, while that for non-Plan expenditure is over Rs 12.19 lakh crore.
Total budgeted expenditure estimates, including Plan and non-Plan stand at Rs 17,94,892 crore, higher than revised estimates for 2013-14 at Rs 15,90,434 crore.
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Tushita is a political writer at thenational.net. Her deep rooted interest in politics, passion for writing and craze for travelling define her. Writing since her school days, she aspires to write lifelong and make the world a happier place to live with the power of her pen.