Govt's austerity drive may end in March

The Office Memorandum issued by the Finance Ministry was valid for the fiscal 2009-10 and would not be applicable from April 1 unless a fresh order is issued extending it.
The memorandum was issued in September 2009 to cut expenditure in government departments in the wake of additional burden on the exchequer because of failure of Monsoon coupled with the economic crisis.

The memorandum had said, "In view of the current fiscal situation and that arising out of insufficient rain in large parts of the country, and the consequent pressure on Government’s resources, there is need for further economy and rationalisation of expenditure."

The order was applicable for every government departments, but ministers were specifically asked not to fly by business class but by economy class only.

Some ministers had objected to this directive but had to fall in line as Finance Minister Pranab Mukherjee insisted that the order be followed.

Minister of State for External Affairs Shashi Tharoor even was sarcastic when he commented on Twitter that he had to travel 'cattle class' because of the austerity drive.

A few ministers reportedly raised the issue again at the Cabinet meeting held to approve the General Budget and were told to wait till March-end.

The government is in a position of re-thinking on these austerity measures, since fiscal deficit will be reined in because of partial roll back of stimulus and increase in excise and customs duties on petrol and diesel.

Besides, the economy has already been showing signs of improvement, with industrial growth posting double digit growth for the consecutive five months.