NEW DELHI: In yet another austerity drive, the Finance Ministry has asked government departments to be prudent when it comes to financing some of their social and cultural schemes which are not of immediate importance.
The ministry has also asked all departments to submit a list of such schemes.
“This is an unprecedented crisis. So funds have to be spent prudently and judiciously. While we are continuing with important social welfare measures, the schemes which can be postponed, or where funding can wait, needs to be reviewed in the light of the present crisis.
We have asked for a list of such schemes and institutions which are being funded by the central government,” a senior official from the Department of Expenditure told this publication.
According to sources, while the instructions are applicable for all ministries, the worst hit will is set to be the Ministry of Culture, the Ministry of Environment, Ministry of Tribal Affairs, and the Ministry of Water Resources.
Last week, Expenditure secretary T V Somanathan had recommended in a report that the environment ministry should disengage 23 autonomous bodies, merge 109 others into 26 bodies, and close several in order to reduce expenditure.
“Disengagement... with a three-year timeline and a gradual 25% budget reduction each year is recommended,” the report had said.
Government officials claim that this will have some impact on the funding for some cultural programmes and grants to NGOs who are working in the segments.
“Certainly there will be an impact but we are being prudent. Once the economy bounces back to normal, we will resume all funding,” the official claimed.
Despite all the measures announced by the government, capital expenditure declined 39 per cent in the second quarter (Q2) and, last month, it had extended curbs on spending imposed on departments from to the quarter ending December 2020 too due to “acute cash stress”.
It had also banned the creation of new posts in the central government, and asked ministries to reduce the number of consultants.