The govt will have to rein in spending and cut subsidies to meet its fiscal deficit target, the finance minister said, underlining that an austerity drive will not be blown off course by an election due next year.
Aiming to restrict the fiscal deficit to 4.8 percent of GDP in 2013-14, the Finance Ministry has ordered all ministries and departments not to buy new vehicles, create new jobs or fill posts lying vacant for over one year.
The Finance Ministry on Wednesday announced a small-bore austerity measures to boost the economy without hampering the operational efficiency of the government which included a cut in non-plan expenditure by 10 percent.
A cut in spending on foreign travel by ministers and officials, a bar on holding meetings in five-star hotels and a 10 percent slash in budget for workshops and seminars are among the austerity measures government is planning prune expenditure in the wake of a tight economic situation.
Worried over deteriorating global economic situation and its impact on India, the government on Wednesday announced that it would resort to "unpopular" austerity measures to deal with fiscal problems but made it clear there is no pressing of "panic button".
Italy buckled to world pressure in a bid to halt a market rout endangering the global economy, pledging to speed up austerity measures and social reforms in return for European Central Bank help with funding.