Govt cuts costs: No first-class travel for babus
With an aim to restrict fiscal deficit to 4.1% of GDP in 2014-15, the Centre has barred officials from holding meetings in 5-star hotels and put a freeze on hirings and filling up posts lying vacant for over one year.
The Narendra Modi government on Thursday ordered a ban on first-class air travel by top bureaucrats as part of its austerity drive to cut down on unnecessary expenditure and make the most of available resources.
The government also told ministries to reduce non-plan expenditure, barring them from making new financial commitments, purchasing new vehicles, creating new posts and holding conferences at five-star hotels.
Government expenditure is classified under two broad heads — plan and non-plan. Funds spent on creating assets through programmes and schemes come under plan expenditure, while non-plan expenditure refers to all spending, including establishment and maintenance activities of the government and the small-bore measures are aimed at cutting discretionary spending by 10% in the fiscal year to March 2015.
“In the context of the current fiscal situation, there is a need to continue to rationalise expenditure and optimise available resources,” said an order issued by expenditure secretary RN Watal that clamped down on secretaries flying first-class while travelling abroad. Last year’s austerity drive had advised them to avoid first-class travel, but quite a few ignored the suggestion.Containing expenditure is central to the government’s aim to keep the fiscal deficit — shorthand for the amount of money the government borrows to fund its expenses — within the budgeted 4.1% of GDP in 2014-15.
The move comes a month after Prime Minister Modi frowned at secretary-rank officers going on frequent foreign trips, saying they should travel only if sending a joint secretary- or additional secretary-rank officer does not serve the purpose.
However, the government made a few changes to earlier versions of the austerity drive to avoid unnecessary inconvenience and paperwork. For instance, it exempted security forces from the ban on buying new vehicles.
In the past, security forces had to seek the finance ministry’s approval for every purchase. “This rule was a big impediment and slowed down our expansion,” said a central reserve police force officer.
The finance ministry also relaxed the rule forcing all officers except secretaries to travel by economy-class, which will now allow officers of the rank of joint secretary and above to travel business-class. The ministry, while striking down the earlier rule that was often criticised as unnecessary, said departments would, however, not be given any more money than what is already budgeted.
“However, there would no bookings in first-class,” Watal’s memorandum said.
The government will also not entertain proposals for participation in study tours or conferences abroad except those that are fully funded by the sponsoring agencies.