BSY govt wakes up to austerity

Plan to save Rs 1,500 cr in five months

But this amount will not be in addition to what the government has already announced to spend on flood relief. This is most likely to be adjusted with the total sum of money the State will end up spending for the cause from its own pocket, official sources said.
Of the total Rs 58,117 crore expenditure for the fiscal 2009-10, Rs 29,500 crore is the plan and Rs 28,617 crore is the non-plan expenditure. Ten per cent of it is around Rs 3,000 crore. With less than six months remaining for this fiscal, the government has grandiose plans to save Rs 1,000 to Rs 1,500 crore by this move.

The Finance department’s plan is to spend less on various subsidies and routine operation and maintenance of the administration that fall under the non-plan category.
The government has estimated to spend Rs 4,359 crore on various subsidies, including power, food and agriculture this fiscal.

Over and above, plans are on cards to save a good chunk of money under the capital expenditure head -- the expenditure of which is estimated to be Rs 9,642 crore this fiscal.
Sources said if the present trend of expenditure continues, the total revised subsidy amount at the end of the fiscal may cross Rs 5,000 crore due several populist measures initiated by the government. For instance, the government's generous distribution of BPL ration cards may shoot up the food subsidy from the estimated Rs 750 crore to Rs 1,000 crore. The government is spending a whopping Rs 2,500 towards power subsidy this year.

As far as saving on the operation and maintenance costs, officials said, the government must become really strict in implementing the austerity measures.
Though the State government had imposed economy measures in November last year in view of economic downturn, none of them was put in practice. Be it foreign junkets for legislators and Cabinet ministers or officials holding meetings in star hotels, the government has been extravagant in its spendings.

Though the CM has often said the non-plan expenditure cut to compensate the shrinking revenue, nothing was done in reality. The rising amount of food subsidy and salaries of the employees in the last six months are testimony to it.

For a rainy day
* Govt wants to save around Rs 1,500 crore in next five months
* Aims to utilise the money on flood relief
* Proposed cuts in subsidies and maintenance overheads