New Delhi: With the looming drought
putting pressure on the Government`s resources, the Finance
Ministry on Monday ordered a 10 percent cut in non-plan
expenditure that would cover foreign and domestic travel and
advertising, besides economy measures on seminars and
The mandatory ten per cent cut in non-plan expenditure
will include spending on domestic and foreign travel,
publications, professional services, advertising and
publicity, office expenses, petrol, oil, lubricants except for
security related requirements and other administrative
The remaining portions of non-plan expenditure,
excluding interest payments, repayment of debt, defence
capital, salaries, pension and the Finance Commission`s grants
to states, will be subjected to a mandatory five percent cut.
No reappropriation of funds to augment non-plan heads
of expenditure shall be allowed during the current financial
year, the Department of Expenditure order said.
Giving the background, the order said in view of the
current fiscal situation and that arising out of insufficient
rains in large parts of the country and the consequent
pressure on government`s resources, there is need for further
economy and rationalisation of expenditure in addition to what
was decided in July.
The order, however, does not give an indication of
how much the government aimed to save by these measures.
The economy measures will come into effect immediately.
Under the economy measures, there will be a complete ban
on holding of meetings and conferences in five star hotels,
and a ten percent cut in expenses on holding of seminars,
conferences, workshops and staging them abroad except in case
of exhibitions for trade promotions.
Under domestic and foreign travel, no travel on
government account by air will take place in first class and
that all domestic travel on government account by air will be
only by economy class irrespective of the entitlement.
Where travel is unavoidable, it will be ensured that
officers of appropriate level dealing with the subject are
sponsored instead of those at higher levels. The size of
delegation and the duration of the visit will be kept to the
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, according to the order.
Besides, purchase of vehicles will not be permitted,
except for operational requirements of the defence forces,
central para military forces and seurity related
Austerity instructions like those on use of
telephones and use of information technology, issued by the
Finance Ministry earlier will continue to be applicable.