Govt asks ministries, departments to cut 'controllable' expenditure by 20%

The move comes amid concerns that the fiscal deficit may exceed the FY22 target of 6.8% of GDP

The finance ministry has asked ministries and departments to cut "all avoidable non-scheme expenditure and aim for a 20% reduction in controllable expenditure". 

The move, which will help the government rein in overall budget spending, comes at a time when there are concerns that the fiscal deficit may exceed the FY22 target of 6.8% of GDP as the government undertakes measures to help people affected by the Coronavirus (Covid-19) pandemic. 

“The government has decided all ministries/departments should take steps to curb wasteful/avoidable expenditure and aim for a 20% reduction in controllable expenditure. All the ministries/departments are requested to take steps to curtail all avoidable non-scheme expenditure and aim for a 20% reduction in controllable expenditure, in compliance with the above decision. Expenditure in 2019-20 may be taken as the baseline for this purpose," said a directive from the finance ministry’s Department of Expenditure.

The list of heads under which expenditure will be controlled include overtime allowance, rewards, domestic travel expenses, foreign travel expenses, office expenses, rents, rates and taxes, royalty, 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.