Mumbai: Keeping in mind about the financial conditions of the country, government has asked the finance ministry to cut short on their avoidable expenses that was estimated about ₹ 12,19,892 crores in July for the year 2014-15. The target of at least 10 percent reduction in non-plan expenditure has also been set by the government. Ministers and officials usually prefer first-class air travel and a stay in the country’s most reputed five star hotels — clipping a huge amount from the government treasury.
“There will be a ban on holding of meetings and conferences at five-star hotels except in case of bilateral/multilateral official engagements to be held at the level of minister-in-charge or administrative secretary, with foreign governments or international bodies of which India is a member,” the ministry said in a note issued in Mumbai. “In the context of the current fiscal situation, there is a need to continue to rationalise expenditure and optimise available resources.”
It further added, “While officers are entitled to various classes of air travel depending on seniority, utmost economy would need to be observed while exercising the choice keeping the limitations of budget in mind. However, there would be no bookings in first class.”
The government proposed to do the financial shortage of 3 percent of GDP by 2016-17. The deficiency reached a high of 5.7 percent in 2011-12 but was lowered in 2012-13 to 4.8 percent with a further decrement in 2013-14 to 4.5 percent by the way of economic management and just by diminishing the avoidable expenditures.
Japanese brokerage Nomura told that the austerity drive would save up to ₹40,000 crores but poses risks to growth. “This would amount to a saving of ₹ 35,000- ₹ 40,000 crore, or 0.3 percent of GDP,” stated in the note.
“Such measures are intended at promoting fiscal discipline without restricting the operational efficiency of the government,” a finance minister said in a statement.