Ban on foreign tours, buying cars as Odisha limits expenses to fight Covid-19
Air and first class rail travel ban for officials were among several measures adopted by the Odisha government on Tuesday as part of its austerity measures to make space for Covid-19 related expenditure.
Odisha finance department secretary AKK Meena in a letter to all the government departments said there would be a complete ban on purchase of new vehicles for the next two years and travel and official tours have to be avoided in general.
“All administrative departments are required to prioritise their expenditure needs in order to limit the expenditure within the resources available with priority to make fiscal space for Covid-19 related expenditure. There would be a complete ban on travel outside the country and air travel in business class using government funds. Air journey should be avoided and meetings through video conferencing or IT may be preferred. In exigencies approval of authority one level higher than the present delegation would be required for journey by air. There would be a complete ban on journey by train in 1st class AC by all government officers,” Meena instructed in the letter.
The finance secretary further said if any officer has to travel, then no reimbursement would be allowed for occupancy in any hotel in Delhi, Kolkata, Mumbai and Chennai.
There would be a complete ban on creation of new posts except for the health & family welfare department.
New engagement of consultants, outsourcing and employing services of retired government officers would be restricted. In case, there is necessity for creation of posts for modernisation of administration or effective implementation of development and welfare programmes, the same would be considered only against abolition of equivalent posts with concurrence of the finance department.
Experts have said that Odisha has no other way than to borrow liberally so as to provide for higher spending on healthcare and continue with its welfare programmes.
Recently, while speaking at a webinar organised by the Odisha Alochana Chakra, former chief secretary Jugal Mohapatra and former NIPFP professor Dr Tapas Sen said as economic activities remained suspended for most part of the April-June period, the Odisha government could raise only 60% of the revenues it had budgeted for the quarter.
“If this trend continues through the rest of the financial year, the government’s revenues in financial year 2020-21 may fall about Rs 49,600 crore, or 40%, of the Rs 1,24,000 crore budget target,” said Dr Pravas Mishra, a public finance analyst with Oxfam India.
“Assuming that economic activities and revenue collections return to normal by October-December quarter, the most optimistic scenario could still leave the state with a revenue shortfall of at least Rs 17,000 crore, or 25%.”
Mohapatra said the government of Odisha could tap the Debt Redemption Fund that has about Rs 12,000 crore lying in it. Also, it has enough headroom to borrow from the RBI via ways and means advances, as the limit for such loans has been raised to 5% of GDP, around Rs 22,000 crore.
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