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No.7(2)1E.Coord/2013
Ministry of Finance
Department of Expenditure
New Delhi, the 18th September, 2013
OFFICE MEMORANDUM
Sub:
Expenditure Management - Economy Measures and Rationalization of Expenditure.
Ministry of Finance, Department of
Expenditure has been issuing austerity instructions from time to time with a
view to containing non- developmental expenditure and releasing additional
resources for priority schemes. The last set of instructions was issued on 31st
May 2012, 1st November 2012 and 14th November 2012. Such measures are intended
at promoting fiscal discipline, without restricting the operational efficiency
of the Government. In the context of the current fiscal situation, there is a
need to continue to rationalize expenditure and optimize available resources.
With this objective, the following measures for fiscal prudence and economy
will come into immediate effect:-
2.1 Cut in Non-Plan expenditure:
For the year 2013-2014, every
Ministry/Department shall effect a mandatory 10% cut in non-Plan
expenditure excluding interest payment, repayment of debt, Defence
capital, salaries, pension and the Finance Commission grants to the States. No
re-appropriation of funds to augment the Non-Plan heads of expenditure on which
cuts have been imposed, shall be allowed during the current fiscal year.
2.2 Seminars and Conferences:
(i) Utmost
economy shall be observed in organizing conferences/
Seminars/workshops. Only such conferences,
workshops, seminars, etc.
which are absolutely essential, should be held
wherein also a 10% cut on
budgetary allocations shall be effected.
(ii) Holding
of exhibitions/seminars/conferences abroad is strongly discouraged except in
the case of exhibitions for trade promotion.
(iii) There
will be a ban on holding of meetings and conferences at five
star hotels.
2.3 Purchase
of vehicles:
Purchase of vehicles is banned until further
orders, except against condemned vehicles.
2.4 Domestic
and Foreign Travel:
(i) All
officers are to travel in economy class only for domestic travel, except
officers in the Apex Scale who may travel in executive class. Officers may
travel by entitled class for international travel, however officers in
Apex scale may travel only by business class. In all cases of air travel,
only thelowest fare air tickets of the entitled class are to be purchased/
procured. No companion free ticketon domestic/ international
travel is to be availed of. The existing instructions regarding
travel on Leave Travel Concession (LTC) would continue.
(ii) It would
be the responsibility of the Secretary of each Ministry/Department to
ensure that foreign travel is restricted to most necessary and unavoidable
official engagements based on functional necessity, and that extant
instructions are strictly followed.
(hi) Where travel is unavoidable, it will be
ensured that officers of the appropriate level dealing with the subject are
sponsored instead of those at higher levels. The size of the delegation and the
duration of visit will be kept to the absolute minimum.
(iv) Proposals
for participation in study tours, workshops/ conferences/ seminars/presentation
of papers abroad at Government cost will not be entertained except those that
are fully funded by sponsoring agencies.
(v) Travel
expenditure (including FTE) should be so regulated as to ensure that each
Ministry remains within the allocated budget for the same. Re- appropriation
proposals on this account would not be approved.
2.5 Creation of Posts:
(i) There will be a total ban on creation of
Plan and Non-Plan posts.
(ii) Posts that have remained vacant
for more than a year are not to be revived except under very rare and
unavoidable circumstances and after seeking clearance
of Department of Expenditure.
3. Observance
of discipline in fiscal transfers to States, Public Sector Undertakings and
Autonomous Bodies at Central/State/Local level:
3.1 Release of Grant-in-aid shall be strictly
as per provisions contained in GFRs and in Departmentof Expenditure's OM
No.7(1)/E.Coord/2012, dated 14.11.2012.
3.2 Ministries/Departments shall
not transfer funds under any Plan schemes in relaxation of
conditions attached to such transfers (such as matching funding).
3.3 The State Governments are required to
furnish monthly returns of Plan expenditure — Central, Centrally Sponsored or
State Plan — to respective Ministries/Departments along with a report on
amounts outstanding in their Public Account in respect of Central and Centrally
Sponsored Schemes. This requirement may be scrupulously enforced.
3.4 The Chief Controller of Accounts must
ensure compliance with the above as part of pre-payment scrutiny.
4. Balanced
Pace of Expenditure:
4.1 As per extant instructions, not more than
one-third (33%) of the Budget Estimates may be spent in the last quarter of the
financial year. Besides, the stipulation that during the month of March the
expenditure should be limited to 15% of the Budget Estimates is reiterated. It
may be emphasized here that the restriction of 33% and 15% expenditure ceiling
is to be enforced both scheme-wise as well as for the Demands
for Grant as a whole, subject to RE ceilings. Ministries/ Departments
which are covered by the Monthly Expenditure Plan (MEP) may ensure that the MEP
is followed strictly.
4.2 It is also considered desirable that in the
last month of the year payments may be made only for the goods and services
actually procured and for reimbursement of expenditure already incurred. Hence,
no amount should be released in advance (in the last month) with the exception
of the following:
(i) Advance
payments to contractors under terms of duly executed contracts so that
Government would not renege on its legal or contractual obligations.
(ii) Any loans or
advances to Government servants etc. or private individuals as a measure of
relief and rehabilitation as per service conditions or on compassionate
grounds.
(iii) Any other exceptional case with the
approval of the Financial Advisor. However, a list of such cases may be
sent by the FA to the Department of Expenditure by 30th April of the
following year for information.
4.3 Rush of expenditure on procurement should
be avoided during the last quarter of the fiscal year and in particular the
last month of the year so as to ensure that all procedures are complied with
and there is no infructuous or wasteful expenditure. FA's are advised to
specially monitor this aspect during their reviews.
5. No fresh
financial commitments should be made on items which are not provided for in the
budget approved by Parliament.
6. The
instructions would also be applicable to autonomous bodies.
7. Compliance
Secretaries of the Ministries/Departments being
the Chief Accounting Authorities as per Rule 64 of GFR shall be fully charged
with the responsibility of ensuring compliance of the measures outlined above.
Financial Advisors shall assist the respective Departments in securing
compliance with these measures and also submit an overall report to the
Minister-in-Charge and to the Ministry of Financeon a quarterly basis
regarding various actions taken on these measures/guidelines.
Sd/-
( R.S.Gujral )
Finance Secretary
