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Government to cut its expenditure, launch austerity drive
Friday June 01, 2012 03:59:41 PM,
IANS
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New Delhi: Facing a
slow-down in the economy, the government has launched an austerity
drive to reduce expenditure, banned new posts and meetings in
five-star hotels besides restricting foreign travel.
The finance ministry, which issued the office memorandum on
"Expenditure Management - Economy Measures and Rationalisation of
Expenditure" Thursday also asked all ministries to reduce non-Plan
expenditure by 10 percent in 2012-13.
"There will be a total ban on holding of meetings and conferences
in five-star hotels...purchase of vehicles is banned until further
orders," said the order.
Official sources said curbing foreign travel and banning meetings
in five-star hotels may help control expenditure, but the
government should focus on reducing various subsidies, including
on fertilisers, oil and food, if it wanted to curb the fiscal
deficit.
The government is targeting to bring down fiscal deficit from 5.7
percent of the GDP in 2011-12 to 5.1 percent in the 2012-13
fiscal.
Not much reduction in the non-plan expenditure can be effected as
around 70 percent of it goes in to paying staff salaries, said
sources.
According to the finance ministry order, the size of the
delegation and the duration of the visit should be kept to
"absolute minimum" in case of foreign travel.
Further, the memorandum "strongly discouraged" holding of
exhibitions, seminars and conferences abroad.
Finance Minister Pranab Mukherjee had earlier told parliament that
he would come out with austerity measures to check fiscal deficit.
"There is an urgent need for rationalisation of expenditure and
optimisation of available resources with a view to improve the
macro-economic environment," the order said.
Secretaries of the ministries would be responsible to ensure
compliance of the austerity measures, it said.
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