The finance ministry has asked each ministry and department to impose a mandatory 10% cut in non-plan expenditure. But, this will exclude interest repayment of debt, defence capital, salaries, pension and finance commission grants to the states. It also announced a 10% cut in budgetary allocation for seminars and conferences and said holding such events abroad should be strongly discouraged except for trade promotion purposes. Purchase of vehicles has been banned until further orders, including against old vehicles. There will be a total ban on creation of new posts and foreign visits should be regulated to ensure that each ministry remains within the allocated budget.
In a move aimed at ensuring transparency and to avoid any controversy, a clause has been added which says the rush on procurement should be avoided during the last quarter of the fiscal and, in particular, the last month of the year to ensure that all procedures are complied with and there is no “infructuous or wasteful expenditure”. Financial advisors have been specifically asked to monitor this aspect in their reviews. The circular signed by expenditure secretary Sumit Bose, said it would be the responsibility of each ministry and department to ensure that foreign travel is restricted to most necessary and unavoidable official engagements.