No mandatory cut in plan expenditure: FinMin

The government today said it has not issued any instructions to reduce the size of plan expenditure, though a 5-10 per cent cut in some non-plan spend has been ordered as part of austerity measures.

"No instructions have been issued for imposing a mandatory cut in plan expenditure...The mandatory cut of 5-10 per cent has been imposed on certain heads of non-plan expenditure as part of austerity measures," Finance Ministry said in a statement issued here today.

Facing revenue shortages, the Finance Ministry has advised all the ministries to cut expenditure on non-plan heads like domestic-foreign travel, advertising publications, professional services, and office expenses by ten per cent for 2009-10.

Moreover, the government will also effect five per cent cut in the remaining portion of non-plan expenditure.

However, interest payments, repayment of debt, defense capital, salaries, pension and the Finance Commission's grants to states have been spared from a mandatory cut.

The hit on the government exchequer due to stimulus packages could be gaged from the fact that fiscal deficit has doubled to Rs 2.45 lakh crore in the first seven months of this fiscal compared to a year ago period.