Finance Ministry orders austerity measures to trim fiscal deficit

A ban has been applied on holding meetings at five-star hotels and first class air travel

Unveiling an austerity drive to cut non-plan expenditure by 10%, government has barred bureaucrats from travelling First Class on overseas visits and have been asked to use video conferencing as much as possible.

With an aim to restrict fiscal deficit to 4.1% of GDP in 2014-15, the Finance Ministry has barred officials from holding meetings in five-star hotels and put a freeze on fresh appointments and filling up posts lying vacant for over one year.

"While officers are entitled to various classes of air travel depending on seniority, utmost economy would need to be observed while exercising the choice keeping the limitations of budget in mind. However, there would no bookings in the First Class," said the office memorandum.

The facility of video conferencing, it said, "may be used effectively".

The Finance Ministry said purchase of new vehicles to meet operational requirement of defence forces, paramilitary forces and security organisations are permitted but ban on purchase of any other vehicles would continue.

"Such measures are intended at promoting fiscal discipline, without restricting the operational efficiency of the government. In the context of the current fiscal situation, there is a need to continue to rationalise expenditure and optimise available resources," it said.

The government proposes to lower the fiscal deficit to 3% of GDP by 2016-17. The deficit which had touched a high of 5.7% in 2011-12, was brought down to 4.8% in 2012-13 and further to 4.5% in 2013-14 by way of austerity measures.

"The task before me is very challenging because we need to revive growth, particularly in manufacturing sector and infrastructure," Finance Minister Arun Jaitley had said in his budget speech. He added that choice has to be made whether or not to be victims of mere populism and wasteful expenditure.