The Finance Ministry on Thursday ordered a mandatory 10 per cent cut in the Centre’s non-Plan expenditure for 2014-15.
The cut does not cover interest payment, repayment of debt, defence capital, salaries, pension or Finance Commission grants to States, says a circular.
Subsidies will face the brunt of the cuts.
The UPA government too had in place austerity measures. For 2013-14, former Finance Minister P. Chidambaram rolled out cuts of 15 per cent on average across both Plan and non-Plan expenditures. Union Finance Minister Arun Jaitley has spared Plan expenditure from his 10 per cent spending cut.
A Finance Ministry release said the objective of the fiscal prudence and economy measures was the need to rationalise expenditure and optimise available resources. The Ministry revived its standard measures, including curbs on conferences abroad or in five-star hotels, purchase of vehicles and staff cars, travel curbs on flying first class and ban on new posts.
