A finance ministry memorandum on Monday asked all ministries and departments to cut expenditure by 10 per cent, given the gathering drought and the state of public finances.
Travel, bringing out official publications, engaging professional services, advertising and publicity are among the areas named in the memo where expenses should be reduced. Other, more crucial areas too, with a few exceptions, face a 5 per cent cut.
“All domestic travel on government account by air will take place only by economy class, irrespective of the entitlement,” the memo said. It has put a complete ban on holding conferences in five-star hotels and buying new vehicles, except for the defence and security forces.
The government has estimated the fiscal deficit at Rs 4 lakh crore or 6.8 per cent of the gross domestic product this year. More than half the districts of the country have been declared drought affected.