Centre cuts costs; halts fresh appointments

Centre cuts costs; halts fresh appointments

Drive likely to slash non-Plan expenditure by 10 pc

Centre cuts costs; halts fresh appointments

In a bid to bring down day-to-day expenses, the government on Thursday asked bureaucrats to abstain from holding meetings in 5-star hotels, avoid travelling abroad in first class and also put a freeze on appointments.

In the run-up to the 2015-16 Budget, the move to freeze fresh appointments and fill up posts that have been vacant for the last year may decelerate Prime Minister Narendra Modi’s commitment to create new jobs.

The Finance Ministry has asked all government departments to make effective use of video-conferencing as part of the austerity drive.

Only seminars and conferences that are absolutely essential should be organised, it said. Holding exhibitions, seminars and conferences abroad have been strongly discouraged except in case of exhibitions for trade promotions.

The austerity drive is expected to cut non-plan expenditure by 10 per cent, the ministry said, though it did not provide any estimate of savings on this account.The non-Plan expenditure relates to subsidy outgoes, interest payments, salary expenses among others. For the current fiscal, the government has proposed a non-Plan expenditure of over Rs 12.19 lakh crore.

The government has been resorting to austerity drives since 2008-09 to promote better fiscal discipline. The last one was put into effect in September 2013. The measure will help the government’s plan to keep the fiscal deficit for the current year at 4.1 per cent of the GDP.

“Such measures are intended at promoting fiscal discipline, without restricting the operational efficiency of the government. In the context of the current fiscal situation, there is a need to continue rationalising expenditure and optimising available resources,” the Finance Ministry stated.

The secretaries of all the ministries have been asked to ensure strict compliance, while financial advisers have been asked to submit reports to the Finance Ministry on a quarterly basis.

The austerity measures will also apply to autonomous bodies such as the All India Institute of Medical Sciences and All India Radio. These organisations will not make fresh commitments over and above what has been provided in the Budget, according to the ministry.

However, the announcement on halting creation of new posts and freeze on hiring comes on the back of Modi’s promise to generate more employment opportunities for the youth. 

“It sends contradictory signals on the government’s aim to create more jobs at a time when the economy shows early signs of recovery,” said an analyst.