With signs of economic revival becoming more pronounced, the government has relaxed the austerity drive undertaken last year and from April 1, government employees will be allowed to fly first class.

“The matter has been reviewed and it has been decided that with effect from April 1, 2010, travel on government account by air, both domestic and international may take place by the entitled class,” an official statement said.

Last September, in the midst of the global financial crisis, the government had directed its employees not to fly first class on government account, irrespective of their entitlement, and fly economy for all domestic travels.

However, the government has not relaxed the austerity directive in case of Leave Travel Concession (LTC).

“... Austerity measures will remain in place for travel by air (where admissible) on LTC, which would continue to be restricted to economy class irrespective of the entitlement,” the Finance Ministry statement said.

The Indian economy slowed down in 2008-09 after being hit by the global financial crisis triggered by the collapse of U.S. investment bank Lehman Brothers and other Wall Street titans beginning September 2008.

The country grew at a subdued rate of 6.7 per cent in 2008-09 after growing at around 9 per cent per annum for the preceding three financial years. In 2009-10, the economy is projected to grow by 7.2 per cent and by 8.5 per cent in 2010-11.

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