New Delhi: With its focus on maintaining low fiscal deficit in check, the Centre on Thursday announced a series of austerity measures, including a ban on air travel first class bureaucrats, all matches in a five stars and buying cars. It also freezes appointments in the central government.
Learned of the austerity measures are aimed at cutting costs outside the Plan by 10 percent, leading to a reduction in the fiscal deficit to a seven-year low of 4.1 percent of GDP.
"These measures are aimed at promoting fiscal discipline without restricting the operational efficiency of the Centre," said a finance ministry statement.
"In the current fiscal situation, there is a need to rationalize spending," he added.
The UPA government had imposed austerity measures in 2012 and 2013 to reduce the deficit.
The creation of new jobs and car purchases are mostly banned and videoconferencing should be used whenever possible.
The Finance Ministry also said that with these measures in place, there will be no impact on interest and debt payments, the defense budget, salaries and pensions.
The ministry said: "While officials are entitled to various kinds of air travel on the basis of seniority, need the largest economy to be observed in exercising the option of keeping budget constraints in mind will not be. reservations first class. "
The Finance Ministry said the purchase of new vehicles to meet the operational requirement of the defense forces, paramilitary units and security teams are allowed, but the ban on the purchase of any vehicle will continue.
"In the context of the current fiscal situation, there is need for further expenditure rationalization and optimization of available resources," he said.
The government intends to reduce the fiscal deficit to three percent of GDP in 2016-17. The deficit, which had touched a peak of 5.7 percent in 2011-12, dropped to 4.8 percent in 2012-13 and in relation to 4.5 percent in 2013-14 through measures austerity.
"The task is very difficult because I have to revive growth, especially in manufacturing and infrastructure," Finance Minister Arun Jaitley said in his budget speech. A choice has to be made on whether or not to become victims of mere populism and waste, he said.
The Finance Ministry said the "mandatory cut of 10 percent" of plan costs excludes interest payments, repayment of debt, defense capital, salaries, pensions and grants to the states. "No re-appropriation of funds to raise their heads out of plan expenses are tax cuts will be allowed during the current fiscal year," he said.
It was said that the austerity measures will be applied to autonomous bodies, adding no new commitments will be made over what was planned in the Budget.
For the current fiscal year (2014-15), the government has proposed expenditure of `5.75 lakh Plan crore, while for non-plan expenditure is Rs 12.19 lakh over crores. The total estimated budgeted expenditures, including Plan and non-Plan, stand at Rs 17,94,892 crore, higher than the revised estimates for 2013-14 at Rs 15,90,434 crore estimated.
