COVID-19 crisis forces Karnataka government to limit expenditure

Strained by the financial implications of the COVID-19 lockdown, the state government has restricted its expenditure to most essential items such as salaries, pensions and basic administrative costs.

“Needless to say, all expenditure on fighting COVID-19 will be given utmost priority,” the Finance Department said in an order laying out guidelines on release of funds and delegation of financial powers for the month of April.

“Due to the prevailing situation of lockdown, the revenues of state government are severely constrained,” the order, which has come bang in the beginning of the new financial year, said.

It has restricted the items of expenditure for which funds — amounting to 1/12th of the budgetary provision for any department — can be released, under 23 heads. For any other expenditure other than the items listed, administrative departments have to approach the Finance Department with justification.

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To ensure compliance of the same, the Treasury is also instructed to upload 1/12th of the budgetary provision only towards the list of items of expenditure in the order, which includes salary and allowances, office expenses, payment to daily wagers/contractual/outsource employees, pension and retirement benefits, social security pensions, subsidy under Anna Bhagya and funds for Integrated Child Development Scheme and others.

Health schemes

The order has allowed expenditure for Arogya Kavacha scheme, health institute building maintenance, and materials and supplies for the Health and Family Welfare Department.

On Wednesday, the Finance Department had directed all administrative departments not to issue any orders on new schemes announced in the 2020-21 Budget or existing schemes.

Department heads issue such orders at the beginning of a financial year on April 1 or 2, according to sources.

The Finance Department has allowed servicing of loans availed by various boards and corporations with some conditions. It has barred departments from purchasing new vehicles or taking up any major repairs of buildings during the month.

According to sources, while quarterly orders designating financial powers are issued, such an order restricting it to a month alone was unprecedented.

The growing cost of the lockdown might compel the government to either delay or roll back projects announced in the budget, sources said.