Economy

No cap on Defence, fertiliser spend in Oct-Dec expenditure management plan

Shishir Sinha New Delhi | Updated on September 28, 2020 Published on September 28, 2020

Finance Ministry issues expenditure management for Oct-Dec with just one change

The Finance Ministry has placed fertiliser and defence services in the category of demands for which now there will not be any monthly or quarterly capping of expenditure during the October-December period.

This is keeping in mind the tensions on the border and to ensure there are no limits on fertiliser subsidy.

This is the only change in the expenditure management for the three-month period starting October 1.

“With a view to manage cash flows of the government, it has been decided to retain and continue with the same expenditure management measures, stipulated for Q1 (April-June) and Q2 (July-September) for Q3 (October-December) of FY 2020-21. However, during Quarter 3, Demand No. 6-Department of Fertilizers, Demand No. 19- Defence Services (Revenue) and Demand Number 20-Capital Outlay on Defence Services are re-classified as category ‘A’,” an office memorandum issued by the Expenditure Department on Monday said.

Keeping in mind the cash crunch, the Finance Ministry issued expenditure-control measures in April. Accordingly, all Central Ministries and Departments were placed in three categories based on demands/appropriations approved in the Budget.

The ‘A’ category has demands/appropriations related to Agriculture, Health and Family Welfare, Pharmaceuticals, Consumer Affairs, Food and Public Distribution, Civil Aviation, Transfer to States and Interest Payments, beside nine others. Now, Fertiliser and Defence will fall in this category. There will be no monthly or quarterly capping.

The ‘B’ category covers demands/appropriations for Posts, Defence Pension, Transfer to Union Territories, Oil and Road Transport and Highways, besides 16 other Ministries and Departments. Here, the quarterly limit would be 20 per cent of the Budget Estimate. Also, the monthly limit for October would be 8 per cent, and 6 per cent each for November and December.

The ‘C’ category has 52 items. The revised guidelines stipulate 15 per cent limit for the quarter and 5 per cent for each of the three months. The key Ministries and Departments include Commerce, Telecom, Coal, Environment, Mines, and MSMEs.

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Published on September 28, 2020
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