Govt asks ministries to target 20% reduction in controllable expenditure

The government has asked all ministries and government departments to target 20 per cent reduction in expenditures like domestic and foreign travel, overtime allowance, rent and office expenses, in the current fiscal year as it tightens its purse strings amid the second wave of the pandemic.

The Department of Expenditure under the Finance Ministry issued an office memorandum in this regard on June 10.

"All the ministries/ departments are requested to take steps to curtail all avoidable non-scheme expenditure and aim for 20 per cent reduction in controllable expenditure.... Expenditure in 2019-20 may be taken as the baseline for this purpose, the memorandum said.

However, expenditure related to containment of the pandemic is excluded from the scope of this order.

The memorandum said, ministries should aim to control expenditures like overtime allowance, rewards, domestic and foreign travel, office expenses, rents, rates and taxes, royalty.

Besides, expenditures related to publications, other administrative expenses, supplies and materials, cost of ration, clothing and tentage, advertising and publicity, minor works and maintenance, service or commitment charges, grants-in-aid general, contribution and other charges, should also be cut.

The

savings that would accrue to the government due to this move cannot be exactly ascertained. This is the second year in a row that the government has come out with measures to rationalise expenditure.

Last year, the expenditure department had asked all ministries /departments to review appointments of consultants, curtail functions and ban use of imported paper for printing as part of measures to rationalise non-priority expenditure.

As per estimates, the government is staring at an additional expenditure of up to Rs 1.45 lakh crore to provide free vaccines and foodgrains to people devastated by the deadly second wave of covid infections.

Reversing a policy where states competed for vaccine supplies for certain age categories, the government earlier this week announced that the central government will procure vaccines for all adults. All above 18 years of age would get free vaccines from June 21.

Also, the free foodgrain scheme that was to end in June has been extended till November 2021.