The economic slowdown has forced the government to go on an economy drive. Perks are history, austerity the future for babus, at least till the good times roll again.
A memorandum sent out by the finance ministry on Monday asks all ministries and departments to reduce non-plan expenditure by 5 to 10% in the current financial year due to the downturn coupled with insufficient rain in the country.
The memorandum, sent to secretaries across all ministries, outlines the cost-cuts planned in domestic and foreign travel, advertising and publicity, office expenses, seminars and conferences, and purchase of vehicles.
For instance, holding exhibitions and seminars abroad will be discouraged while meetings and conferences in five-star hotels are to be banned. There will no first-class air travel at the government’s expense. For domestic travel, only economy class will be permitted, irrespective of entitlement. Travel should be permitted if absolutely necessary, and the size of the delegation and the duration of stay should be limited, says the memorandum.
Purchase of government vehicles has been restricted as well. Sushma Nath, secretary, expenditure department in the finance ministry, has written in her note that “in view of the current fiscal situation and that arising out of insufficient rain in large parts of the country, and the consequent pressure on the government’s resources, there is need for further economy and rationalisation of expenditure”. management circulars were issued to government ministries and departments on July 24, 2009, June 5, 2008, and September 17, 2007.
There will be a mandatory 10% cut in non-plan expenditure under various heads such as travel, publications, professional services, advertising & publicity, and office expenses.
The remaining components of non-plan expenditure, but excluding defence capital, salaries, pension, finance commission grants to the states, repayment of debt and interest payments, will be subjected to a 5% cut according to the finance ministry order, a copy of which has gone to the Planning Commission, the prime minister’s office and the cabinet secretariat.
The memorandum has noted that there would be no increase in the budgetary allocation under the heads of non-plan expenditure, unless the circumstances are extraordinary.
