Finance Minister Arun Jaitley on Sunday said that it is important for a country to have an efficient expenditure management system. Otherwise, it could risk going the way of Greece, he said referring to that country’s ongoing debt crisis.
“In post liberalised era, competitiveness, cost and efficiency management have become the key words of survival and growth. For good governance, the government has not only to augment its resources through better revenue collections but also to manage its expenditure well,” he said after inaugurating the First Indian Cost Accounts Service Day here.
The Minister asked the officers of the Cost Accounts Service to “upgrade their professional skills and expertise in order to play a proactive role in assisting the government in achieving the highest level of cost efficiency in its projects, schemes and operations.”
Key suggestionsEarlier, Ratan P Watal, Secretary (Expenditure), said that the Indian Cost Accounts Service officers dealt with topics of contemporary significance such as pricing of industrial products and services, determination of various subsidies, petroleum under recoveries, and systems studies.
The Chief Adviser, Cost, he said, had made several key suggestions for operational improvements, including areas for cost reduction. “These recommendations have helped the government to effect substantive savings in the government expenditure on many occasions,” Mr. Watal said.
He said the government managed to control expenditure through rationalisation. “The ongoing fiscal consolidation process has been successful in taming the fiscal deficit… However, the public finance on revenue side requires attention, particularly in view of the target set for the revenue deficit under the new Fiscal Responsibility and Budget Management regime. This necessitates structural changes in the Plan spending and definitive measures to contain Non-Plan spending within sustainable limits.”
SubsidiesMr. Watal said that in order to achieve the targets of fiscal consolidation, it was essential to reduce spending on subsidies by improving their targeting mechanism. “The efforts of the government would be to address this issue with a two-pronged strategy. The government is committed to progressively pursuing subsidy reforms in a manner that will ensure efficient targeting of subsidies to the poor and needy, while also saving scarce financial resources for investment in infrastructure and pursuit of new development programmes announced by the government from time to time,” he said.
