The Finance Ministry has brought back limited expenditure curbs for some Ministries and Departments for three months starting July 1. However, there will be no curbs relating to health, MSME, rural development etc.
“Keeping in view the evolving situation arising out of Covid-19 and anticipated cash position of government, it is felt essential to regulate the Quarterly Expenditure Plan (QEP)/Monthly Expenditure Plan (MEP) of specific Ministries/Departments for Q2 (July-September, 2021),” said an Office Memorandum issued on Wednesday by the Economic Affairs Department.
Accordingly, demands/appropriations related with various central Ministries and Departments have been grouped into two. The first group comprising 19 demands/appropriations will have no cap. These are related with Departments such as Health & Family Welfare, Pharma, Fertiliser and Food and Ministries such asRailways, MSME and others.
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The second group has 81 demands/appropriations related with Ministries and Departments. These will be required to “restrict the overall expenditure within 20 per cent of BE 2020-21 in Quarter 2”. These include Ministries such as Civil Aviation, Home, Labour, Mines, Power beside others and Departments like Post, Consumer Affairs, Telecommunication, Fisheries, Heavy Industries besides others.
Three categories last year
Last year, in April, an expenditure cap was announced. For this, all the Central Government Ministries and Departments were divided into three categories based on demands/appropriations approved in the Budget. For the first category (demands/appropriations related to Agriculture, Health and Family Welfare, Pharmaceuticals etc.), there was no monthly or quarterly capping.
The second category had 31 demands/appropriations related to Fertilisers, Posts, Defence Pension, Transfer to Union Territories, Oil and Road Transport and Highways, besides 18 others Ministries and Departments with quarterly limit of 20 per cent of the Budget Estimate and different monthly limit.
The third category had 52 items, 15 per cent limit for the quarter and 5 per cent for each of the three months.
Spending norms
Later, some changes were made and nearly after two-and-a-half-quarters, the curbs were removed. Based on the guidelines prepared in August 2017, there is no monthly or quarterly capping for first 9 months. However, for the last quarter, there is a quarterly capping of 33 per cent and monthly capping of 15 per cent. A senior Government official explained that a Central Ministry or a Department is required to make monthly or quarterly expenditure plan and submit to the Finance Ministry.
“For first nine months, it is the discretion of specific Ministry or Department to decide how much to spend, but for the fourth quarter, it has to follow 33 per cent for quarter and 15 per cent of March as prescribed by the Finance Ministry,” he said.