Govt relaxes norms for ministries in bid to push public expenditure

Ministries are now permitted to utilise unspent balances from Quarterly Expenditure Plan for 1st and 2nd quarter within a fiscal year under intimation to Budget Division for cash management purposes

In a bid to push public expenditure, the government has relaxed norms for ministries and department to utilise unspent amounts in the subsequent quarter in the same financial year.

Ministries or departments are now permitted to utilise the unspent balances from Quarterly Expenditure Plan (QEP) for the first and second quarter within a financial year under intimation to the Budget Division for cash management purposes, according to an office memorandum issued by the Budget Division of the Finance Ministry.

Unspent balances from QEP-2 and QEP-3 may be utilised in QEP-3 and QEP-4 respectively only after formal and prior approval of the Expenditure Secretary has been obtained, it added.

"Ministry/Department should not under any circumstance presume prior approval of Expenditure Secretary. This has to be formally obtained prior to utilising the unspent balances. Seeking post facto approval is not an option," as per the memorandum dated May 25, 2022.

No more than 33 per cent and 15 per cent of expenditure of the Budget Estimates during a financial year would be permissible in the last quarter and last month of the financial year, respectively.

It also advised all Financial Advisers to ensure that Monthly Expenditure Plan or Quarterly Expenditure Plan (MEP/QEP) tracking of sanctions and concurrent expenditure against Budget provisions are available.

The government has laid emphasis on capital expenditure to push growth hit by the pandemic. It is expected that the increase in public spending would crowd in private investment.

Finance Minister Nirmala Sitharaman raised capital expenditure (capex) by 35.4 per cent for the financial year 2022-23 to Rs 7.5 lakh crore to continue the public investment-led recovery of the pandemic-battered economy. The capex last year was Rs 5.5 lakh crore.

The spending on building multimodal logistics parks, metro systems, highways, and trains is expected to create demand for the private sector as all the projects are to be implemented through contractors.