Austerity drive: govt. bans meetings in five-star hotels

September 18, 2013 07:23 pm | Updated June 02, 2016 01:13 pm IST - New Delhi

The Central government on Wednesday unveiled austerity measures, putting a freeze on fresh appointments, banning holding of its conferences in 5-star hotels and barring officials from executive class air travel, in a bid to check fiscal deficit from going out of control.

Battling slow economic growth and not too robust tax collections yet, the government came out with a slew of measures that will ensure that Ministries and departments will not buy new vehicles, create new jobs or fill posts lying vacant for over one year.

The Finance Ministry on Wednesday issued a circular containing the steps, which will cut non-Plan expenditure by 10 per cent, a day after Finance Minister P. Chidambaram met Financial Advisors of various Ministries to impress upon them the need for austerity and to contain expenditure within the budget target.

The measures aim at restricting the fiscal deficit to the budgeted figure of 4.8 per cent of the GDP in 2013-14.

The Ministry has directed that the size of delegations going abroad should be kept at “absolute minimum.”

“Such measures are intended at promoting fiscal discipline, without restricting the operational efficiency of the government. In the context of the current fiscal situation, there is a need to continue to rationalise expenditure and optimise available resources,” the Ministry said. Mr. Chidambaram had earlier said that he had drawn a red line and would not allow the fiscal deficit to breach the target of 4.8 per cent of the GDP in 2013—14. The various austerity measures helped the government to contain the fiscal deficit at 4.9 per cent of the GDP in the previous financial year, against the budgeted target of 5.1 per cent.

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