Non-essential spend likely to be curbed

Non-essential spend likely to be curbed

Faced with a slowing economy and challenging scenario to meet its fiscal deficit target, the government may come up with some hard decisions to curb non-essential expenditure.

Efforts are also on to push plan expenses and the idea is not to effect a cut in that as it would impede growth in the economy.

Finance Minister P Chidambaram, who met financial advisors of various departments on Tuesday, asked them to strictly adhere to their budgeted spending limits and also produce a utilisation certificate of such spends.

Financial advisors play a crucial role in controlling expenditure and they report directly to the expenditure secretary in the finance ministry.

“Finance Minister asked advisors to spend within budget limit and sought their cooperation to achieve fiscal deficit target of 4.8 per cent,” according to Minister of State for Finance J D Seelam, who attended the meeting.

"We were checking the level of spending by government departments. We want the financial advisors to spend the money the way they would spend their own money," Seelam said.

The government is likely to issue orders on rationalisation of expenditure in the next few weeks, another official said.

Although no target has been set for a spending cut yet, sources in the ministry said, a 10 per cent cut in non-plan expenses is quite possible as the government continues to take necessary measures to moderate inflation and check fiscal deficit.