Centre directs austerity measures for ministers, babus
"Such measures are intended at promoting fiscal discipline, without restricting the operational efficiency of the government. There is a need to continue to rationalise expenditure and optimise available resources," a Finance Ministry statement said.
Under the austerity measures, ministers and Government officials has been barred from holding meetings in five-star hotels and traveling in first class of airlines.
"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," the statement said. The Finance Ministry added that there will be no needless fresh government appointments either.
It has also been learnt that the Finance Ministry has directed all ministries to take prior clearance of the Prime Minister's Office (PMO) before foreign tours. The ministers have also been asked to use video conferencing as much as possible instead.
Only seminars and conferences that are absolutely essential should be organised, it said, adding that "holding of exhibitions/seminars/conferences abroad is strongly discouraged except in case of exhibitions for trade promotions."
According to reports, the austerity measures is aimed to provide a 10 percent cut in non-plan, or discretionary, expenditure.
Though, as per ministry’s statement, interest and debt payments, the defence budget, salaries and pensions will not be affected.
It has been learnt that, the measures were taken following the fact that the fiscal deficit, i.e. the gap between government expenditure and revenue - has neared its threshold level.
According to media reports, the central government has set a challenging fiscal deficit target at Rs. 5.31 lakh crore, or 4.1 per cent of the GDP (gross domestic product) for the current fiscal year.
India's fiscal deficit touched nearly 75 per cent of the full-year target, or Rs. 3.97 lakh crore, in just the first five months of the fiscal year (April-August). It was pegged at 4.5 per cent of GDP in 2013-14.