Punjab govt ups spending limit of depts, says focus on priority areas

The Punjab government, which presented the ₹1.96 lakh-crore budget on March 10, has decided to stagger the expenditure over the year, allowing the departments to spend up to 50% of their budgetary allocation in the first six months of this financial year and the balance in the remaining period, two officials aware of the development said

The Punjab government has allowed a higher expenditure limit to its departments in the first half (April to September) of the financial year 2023-24 as compared to the same period of the previous year while telling them to spend on priority areas having “social and economic multiplier effect” and reduce wasteful expenses.

Punjab government has allowed a higher expenditure limit to its departments in the first half (April to September) of the financial year 2023-24 as compared to the same period of the previous year. (HT File)

The state government, which presented the ₹1.96 lakh-crore budget on March 10, has decided to stagger the expenditure over the year, allowing the departments to spend up to 50% of their budgetary allocation in the first six months of this financial year and the balance in the remaining period, two officials aware of the development said. In the financial year 2022-23, the departments were asked to spend not more than 45% of their annual budget in the first half and the remaining 55% in the next six months.

“The departments have been asked to plan their spending accordingly. The idea is to accelerate the pace of development works from the first quarter itself and move towards frontloading of expenditure,” said one of them, on condition of anonymity, pointing out the tendency of the government departments to make a slow start and incur a bulk of their expenditure in the last two quarters.

Excess expenditure to entail disciplinary action

The finance department, which sent detailed guidelines on the management of state finances recently to all administrative secretaries and heads of departments, has asked them to ensure that the expenditure is incurred within the budgetary allocations approved in the budget estimates (BE) for the current fiscal and take specific clearance in case of any additional fund requirement. Any expenditure incurred in excess of the budgetary allocation provided in 2023-24 BE without the explicit prior approval of the finance department will entail not only strict disciplinary action against the authority sanctioning such expenditure but also the summary rejection of any proposal for revision of the budget, according to the instructions.

More autonomy granted to departments

The departments have also been allowed more autonomy to plan their expenditure within the approved budget, thereby improving the efficiency of their spending. “There is a lot of delegation and they need not come to the finance department for clearance. This will reduce unnecessary administrative hassles. The administrative secretary will be the competent authority to issue sanctions as per the budgetary allocations,” the official quoted above said. The departments will, however, require the FD’s prior approval before incurring expenditure on foreign travel, engaging new professionals or service providers, and purchasing staff cars. The finance department has also instructed all senior officers to meet their tax and non-tax revenue targets, warning that the department, which fails to achieve the targets without “reasonable justification”, may face a reduction in its budgetary allocation. The state government, in the 2023-24 BE, projected growth of 17% in tax revenue and 29% in its own non-tax revenue.