Concerns over fiscal deficit, government tightens expenditure

The government has asked all ministries and departments to cut down on wasteful expenditures. The order issued by the Ministry of Finance has asked all Ministries/Departments to aim for a 20 per cent reduction in controllable expenditure with reference to the expenditure in 2019-20. The move comes amid the concerns that the fiscal deficit may exceed the FY22 target of 6.8% of GDP as an impact of the measure taken to compact the COVID 19 pandemic.

However, the expenditures related to the containment of the Covid-19 pandemic is excluded from the scope of the controllable expenditures.

Read the order: Fin Min: Aim for 20% reduction in controllable expenditure

“The government has decided all ministries/departments should take steps to curb wasteful/avoidable expenditure and aim for a 20% reduction in controllable expenditure. All the ministries/departments are requested to take steps to curtail all avoidable non-scheme expenditure and aim for a 20% reduction in controllable expenditure, in compliance with the above decision. Expenditure in 2019-20 may be taken as the baseline for this purpose," said a directive from the finance ministry’s Department of Expenditure.

The Ministry has suggested a list of heads under which expenditure can be controlled. The list includes overtime allowance, rewards, domestic travel expenses, foreign travel expenses, office expenses, rents, rates and taxes, royalty, publications, other administrative expenses, supplies and materials, cost of ration, clothing and tentage, advertising and publicity, minor works and maintenance, service or commitment charges, grants-in-aid general, contribution and other charges.

Read the order: Fin Min: Aim for 20% reduction in controllable expenditure