Struggling to curb the fiscal deficit, the government on unveiled a slew of austerity measures on Wednesday. The finance ministry issued a circular to all government departments banning meetings at five-star hotels and restricting air travel by senior officials to economy class.
The ministry also directed other ministries and departments to not buy new vehicles, create fresh jobs or fill posts lying vacant for over a year.
Restrictions have also been imposed on foreign travel and size of official delegations going abroad has to be kept to an absolute minimum.
"In the context of the current fiscal situation, there is a need to continue to rationalise expenditure and optimise available resources," the finance ministry said. The austerity steps form part of the government's move to restrict non-plan expenditure by 10 per cent. The government had introduced similar austerity measures in 2009, when the economy had slowed down due to the economic meltdown. The finance ministry had asked various ministries and departments to cut non- plan expenditure by 10 per cent. However, past experience shows that officials often tend to ignore these directions.
Senior officials admitted that these austerity measures will not cause any major reduction in the fiscal deficit, which has soared due to the huge subsidy bill. With the food subsidy expected to be in the region of Rs 140,000 crore and the petroleum subsidy bill likely to exceed Rs 160,000 crore, the measures represent a mere drop in the ocean. "The idea is to send a message down the line that everyone has to contribute his bit to cut costs," a senior official remarked.
According to the new circular, only seminars and conferences that are absolutely essential should be organised. Holding of exhibitions, seminars or conferences abroad is strongly discouraged except in case of exhibitions for trade promotions. All officers are to travel in the economy class only for domestic travel except officers in the apex scale, who may travel in executive class. The restriction will not apply for international travel.
The ministry said that the measures would also apply to autonomous bodies such as the All India Institute of Medical Sciences and All India Radio adding that no fresh commitments would be made over and above what was provided in the Budget.
No reappropriation of funds to augment the non- plan heads of expenditure on which cuts have been imposed shall be allowed during the current fiscal.
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