Ban on creation of posts, purchase of vehicles, cut in air
travel, no change in LTC Air-travel entitlement etc. under economy
measures
Lastest order on Expenditure Management - Economy Measures and Rationalization of Expenditure by FinMin
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 the lowest fare air tickets of the entitled class
are to be purchased/ procured. No companion free ticket on 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 Department of 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 Finance on a quarterly basis
regarding various actions taken on these measures/guidelines.
Sd/-
( R.S.Gujral )
Finance Secretary
Source: http://finmin.nic.in/the_ministry/dept_expenditure/notification/emre/ExpMan_EcoMeasure18092013.pdf
