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Finance Ministry says no new schemes till March 2021 | Coronavirus crisis: Finance Ministry bans new spending till March 2021, new schemes announced in budget will not start

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Finance Ministry says no new schemes till March 2021

new Delhi. The Ministry of Finance, facing a cash-crunch, has barred all ministries and departments from launching any new scheme in the financial year 2020-21. The Finance Ministry has issued an order prohibiting the expenditure of new schemes for one year. Only the expenditure under the Pradhan Mantri Garib Kalyan Yojana and the Self-Reliant India Campaign will be approved. New schemes announced in the budget will also not be introduced during the current financial year.

The Ministry of Finance has taken this decision in view of meeting Kovid-19 epidemic related expenses. Because the lockdown implemented to prevent the spread of corona virus infection has reduced the government's revenue and also increased the government's spending due to the economic downturn.

According to the latest directive from the Department of Expenditure of the Ministry of Finance, the schemes for which the allocation has already been made for the current financial year, has also been put on hold till next 9 months i.e. 31 March 2021.

The Department's directive states that the available funds should be used judiciously to meet contingent and changing priorities, given the unprecedented demand for public financial resources. In its order issued on 4 June, the Department of Expenditure has stated that there has been an unprecedented increase in the demand for public financial resources during the Kovid-19 epidemic, in view of which available funds should be used judiciously on contingent and changing priorities.

The order states that the ministries / departments will now have to seek in-principle approval from the Department of Expenditure of the Ministry of Finance for new proposals. The government has taken this decision at a time when its revenue collection has come down to an all-time low. According to data provided by the CGA, the total receipts of the government in April 2020 stood at Rs 27,548 crore, which is only 1.2 percent of the budget estimate. On the contrary, the total expenditure of the government has been Rs 3.07 lakh crore, which is 10 percent of the budget estimate.

This is the second time the government has cut its spending during the Corona crisis. Earlier, on 8 April, the government announced a ban on expenses. The government had cut expenditure of all ministries and departments by 15-20 percent in the first quarter of the current financial year. Along with this, the government has also banned dearness allowance of its employees and pensioners.

This post was published on June 5, 2020 1:34 pm

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