As cash is scarce, the Finance Ministry on Wednesday announced capping expenditure for various Ministries and Departments barring Health, Agriculture, Railway and 14 others. Experts said such restrictions have been imposed for the first time in the recent past.

“Keeping in view the present situation arising out of Covid-19 and the consequential lockdown, it is expected that the cash position of the government may be stressed in Q1 (April to June) of 2020-21,” Budget Division of the Finance Ministry said in an office memorandum (OM). It is thus essential to regulate the government expenditure and fix the Quarterly Expenditure Plan (QEP) and Monthly Expenditure Plan (MEP) of various Ministries and Departments.

Accordingly, all the Central Government Ministries and Departments have been divided into three categories based on demands/appropriations approved in the Budget. The first 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. There will be no monthly or quarterly capping. However, every expenditure proposal must adhere to the existing guidelines and vetted by the Finance Ministry. These items are critical to fight Covid-19 and have to be prioritised for resources. The second category has 31 demands/appropriations related to Fertilizers, Posts, Defence Pension, Transfer to Union Territories, Oil and Road Transport and Highways, besides 18 others Ministries and Departments.Here, the quarterly limit would be 20 per cent of the Budget Estimate. Also, the monthly limit for April would be 8 per cent and 6 per cent each for May and June.

The third 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, Telcom, Coal, Environment, Mines, MSMEs and others.

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