In an attempt to contain non-developmental expenditure and promote fiscal discipline, the Finance Ministry on Wednesday announced austerity measures, including a “total ban on creation of plan and non-plan posts” and cut in non-plan expenditure by 10 per cent.
To rein in the fiscal deficit to 4.8 per cent of the GDP in 2013-14, the most alarming measures it has taken, despite it being an election year, is a complete freeze on new appointments. Not even the Indian Railways, the biggest government job provider, has been kept out of the latest job-cut drive. Experts feel the middle class, already pinched by soaring inflation and rising interest rates, will now have to forget about reliable employment opportunity in the government sector.
In its four-page memorandum, the Finance Ministry sternly states: “Posts that have remained vacant for over a year are not to be revived except under very rare and unavoidable circumstances and after seeking the clearance of the Department of Expenditure.” In other words, no new recruitment till the economy looks up.
The states have also been asked to fall in line. Sounding a warning of sorts to State governments, PSUs and other recipients of Central government funds, the Finance Ministry states in bold letters that observation of “discipline in fiscal transfers” have be maintained.
The Centre, henceforth, will not transfer funds for schemes under planned expenditure, in relaxation of conditions attached, unless states release their matching funds. This could be alarming for State governments staring at near-bankruptcy like Punjab, West Bengal and Kerala. Even release of grants-in-aid will be strictly monitored. The State governments will also have to furnish monthly returns of Plan expenditure on Central, Centrally-sponsored and State plans, along with reports on amounts outstanding in their Public Accounts. “These requirements may be scrupulously enforced,” the FinMin memo says.
As for Central government and its employees, the direction is to travel “cattle class”, at least inside the country. Only officials in the apex scale may travel by executive class. But all officials have been asked to buy the cheapest tickets available.
Other instructions are: No buying of new cars, no rushing to procure avoidable items, no advance payment unless sanctioned by the Dept of Expenditure on compassionate grounds. As for seminars, conferences and exhibitions, these are better avoided, especially abroad, unless it is for emergency trade promotion, and not in five-star hotels. Tighten the belt. The economy is unlikely to pick up in another year’s time. That’s the message.
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