Union Finance Ministry’s Austerity Drive to meet the Fiscal & Revenue Deficit for 2011-12

The Union Finance Ministry stopped all departments from meeting or holding conferences in five-star hotels, banned purchase of new vehicles, put strict curbs on foreign travel and also prohibited creation of new posts on 11 July 2011. The directive was issued by the government with an objective carry on the process of fiscal consolidation vigorously and to meet the fiscal and revenue deficit targets announced in the Budget for 2011-12.

The Finance Ministry also declared that 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.

According to the directive issued, new vehicles can be bought only for operational requirements of defence and paramilitary forces and other organisations involved in security operations. The ministry called for a ban on creation of Plan and non-Plan posts except for new organisations.

Consultants can be engaged only for high quality services for which the concerned ministry/ department does not have requisite expertise. No money would be released to any entity which defaulted in furnishing utilisation certifications for grants-in-aid released by the central government without its prior approval.

The directive from the ministry requires the state governments to furnish monthly returns of Plan expenditure — central, centrally- sponsored or state plan to respective ministries/ departments along with a report of amounts outstanding in their public account of central and centrally sponsored schemes.

The ministries and departments have been asked to submit an overall report on compliance on a quarterly basis.