The Union Minister of Finance, P. Chidambaram, on 18 September 2013 announced the strictness measures such as a complete ban on the creation of non-plan and plan posts, as well as a slash in the non-plan expenditure by 10 percent. The austerity measures were announced in order to contain the non-developmental expenditure as well as for the promotion of fiscal discipline.
In order to cut the rising fiscal deficit of 4.8 percent of the GDP in 2013-14, the strictest of all measures include an overall halt on the new appointments. It is important to note that this is the strictest measure on the part of the UPA Government despite being in the election year. In the recent job-slashing drive, even the Indian Railways, this is the biggest Government job provider, has not been spared.
The Finance Ministry issued a 4-page memorandum which stated, “Posts that have remained vacant for over a year are not to be revived except under very rare and unavoidable circumstances and after seeking the clearance of the Department of Expenditure.” This implies that there will be no recruitment now till the betterment of the economy.
In the meanwhile, the Finance Ministry also stated that there should be maintenance of discipline in the fiscal transfers. The Union Government of India from now will not be transferring any funds for the schemes which are under the planned expenditure, until and unless the States release the funds of equal amount.
The Finance Ministry issued warning that even the release of the grants-in-aid will be monitored very strictly. Apart from this, all the State Governments will have to now on, furnish the monthly returns of Plan expenditure on Central, Centrally-sponsored and State plans together with the reports on the amount which is outstanding in the Public Accounts.
The Central Government as well as its employees were asked to travel in the economy class, apart from the officials in upper scale. The upper scale officials are allowed to travel through the executive class. However, all the employees have been issued advice to travel with the cheapest tickets available.
Other instructions issued by the Finance Ministry included not buying the new cars, not rushing for procuring avoidable items and no advance payment unless sanctioned by the Dept of Expenditure on compassionate grounds.
The Union Minister of Finance explained that by tightening the belt, the Indian economy would pick up by 2014. These measures have been announced at the time when the fiscal deficit of India reached 62 percent of the Budget target in merely four months time period, i.e., from April-July 2013-14.