The measures that are aimed at cutting non-plan spending by 10 per cent includes a ban on filling of vacant posts to reduce fiscal deficit to a 7-year low of 4.1 per cent of GDP. "Such measures are intended at promoting fiscal discipline, without restricting the operational efficiency of the government," a finance ministry statement said.
"In the context of the current fiscal situation, there is a need to continue to rationalize expenditure and optimize available resources," it added. The previous UPA government had also clamped similar measures in 2012 and 2013 to cut down on fiscal deficit. Creation of new positions as well as car purchases are mostly banned and video conferencing should be used wherever possible. Interest and debt payments, the defence budget, salaries and pensions will not be affected by these steps, it said.
With an aim to restrict fiscal deficit, the Finance Ministry said "While officers are entitled to various classes of air travel depending on seniority, utmost economy would need to be observed while exercising the choice keeping the limitations of budget in mind. However, there would no bookings in the First Class." The facility of video conferencing, it said, "may be used effectively".
The Finance Ministry said purchase of new vehicles to meet operational requirement of defence forces, Paramilitary forces and security organisations are permitted but ban on purchase of any other vehicles would continue.
"In the context of the current fiscal situation, there is a need to continue to rationalise expenditure and optimise available resources," it said. The government proposes to lower the fiscal deficit to 3 per cent of GDP by 2016-17. The deficit which had touched a high of 5.7 per cent in 2011-12, was brought down to 4.8 per cent in 2012-13 and further to 4.5 per cent in 2013-14 by way of austerity measures.
"The task before me is very challenging because we need to revive growth, particularly in manufacturing sector and infrastructure," Finance Minister Arun Jaitley had said in his budget speech. Choice has to be made whether or not to be victims of mere populism and wasteful expenditure, he had said.