Adhere to Q4 spending cap: FinMin asks ministries

Facing the resource crunch, the Finance Ministry has asked all government departments to strictly adhere to its guidelines on restricting expenditure to 33% of the Budget Estimate in the last quarter of the financial year. Amid a tight fiscal situation, Finance Minister P Chidambaram himself may keep a close tab on the expenditure pattern of various ministries.

In the recently concluded pre-Budget, Revised Estimate meetings, Finance Secretary RS Gujral emphasised on the need for prudent financial management and expenditure rationalisation due to the government’s tight resource position in the current financial year.

The necessity to curb rush of expenditure in the last quarter of the year to 33% of the total expenditure estimated for the full financial year and restricting the expenditure to 15% in March was reiterated.

 

“Compliance of these instructions is being monitored at the highest level in the Ministry of Finance. All Financial Advisors are requested to ensure compliance of these instructions without any deviation,” Rajat Bhargava, joint secretary (Budget), said in an office memorandum.

In the Revised Estimates, the Finance Ministry has also cut allocations of some departments who were not able to utilise funds sanctioned under Budget Estimates. It said where the Revised Estimates for 2012-13 are lower than the Budget Estimates, actual expenditure may be kept within RE ceilings.

The government has estimated its 2012-13 expenditure at Rs 14.9 lakh crore, of which 52.3% or Rs 7.79 lakh crore has been used till October, against 54.1% in the same period of 2011-12.

In another office memorandum last month, the ministry had said it would not release fresh funds to autonomous bodies or non-government organisations unless they certify that the money provided to them in the past had been used.

In May this year, the government had announced austerity measures to cut down its expenditure. Apart from a 10% cut in non-plan expenditure, it barred ministries from conducting conferences in five-star hotels, buying new vehicles or travelling abroad unless absolutely necessary. Also, a total ban was imposed on creation of new government posts.

The ministry has revised its target to rein in fiscal deficit to 5.3% of GDP for this fiscal against 5.1%, pegged in the Budget. Till October, fiscal deficit had reached 68% of revised target.