Govt curtails expenditure of ministries in March to contain fiscal slippage
The ministry’s directive could affect expenditure plans of laggard ministries, which have huge resource allocations
February 28, 2020 / 12:02 PM IST
The Finance Ministry has asked central government departments and ministries to restrict expenditure in March to 10 percent of their Budget allocated for FY20 instead of 15 percent to contain fiscal slippage, Mint reported.
In a letter dated February 11, the Department of Expenditure in the Finance Ministry told departments that the “rush of expenditure, particularly in the closing months of the financial year, shall be regarded as a breach of financial propriety and shall be avoided," citing General Financial Rules, 2017.
The budget division of the Department of Economic Affairs had in December last year wrote to departments asking them to limit their expenditures to 25 percent of budget estimate (BE) in the January-March period against the normal practice of spending 33 percent in the last quarter of the fiscal, the report said.
In case of a reduction in expenditure ceiling in the revised estimate (RE) against BE, the Finance Ministry is said to have directed that expenditure should be restricted to the ceiling indicated in RE.
The website of the Controller General of Accounts has stated that the ministries and departments have spent Rs 21.1 lakh crore in the nine months ended December 31, leaving Rs 5.9 lakh crore (22 percent of RE) available for spending during the three months to March.
In Budget 2020, Finance Minister Nirmala Sitharaman slashed expenditure allocation for FY20 by around Rs 88,000 crore to Rs 27 lakh crore, the report said.
According to the report, the ministry’s directive could affect expenditure plans of laggard ministries, which have huge resource allocations. They are agriculture, housing and urban affairs, human resource development, Jal Shakti, railways, and women and child development, which have spent less than 75 percent of their allocations between April and December.