Travel, overtime, & rent: Government wants departments to decrease expenditures by 20%

Concerns that the budget deficit may surpass the FY22 objective of 6.8% of GDP owing to mounting covid-related costs prompted the Central Government to encourage all ministries and departments to slash "avoidable, unnecessary, and controlled" expenditure such as overtime allowance and travel by 20%.

Advertisements, publicity, overtime allowances, bonuses, domestic and international travel expenditures, and minor maintenance work are just a few of the areas where the Union Finance Ministry wants all government ministries and agencies to slash spending by 20%.

All secretaries and financial advisers of ministries and departments have received the list of ideas. Meanwhile, the Finance Ministry has stated that "expenditure linked to the control of the Covid-19 outbreak is exempt from the scope of this decree."

Reportedly, this is the Ministry's second year of issuing such instructions. Concerns about tax collections owing to Covid prompted the government to propose steps to cut non-development spending and prohibit the establishment of new roles in ministries and departments in September last year.

Overtime allowance, rewards, domestic/international travel expenses, office expenses, rents, rates and taxes, royalty, publications, other administrative expenses, supplies and materials, cost of ration, clothing and tentage, advertising and publicity, minor works, maintenance, service or commitment charges are among the areas where “expenditure shall be controlled,” according to the most recent office memorandum, dated 11th June.

“The government has agreed that all ministries/departments should take efforts to reduce wasteful/uncontrollable spending and strive for a 20% decrease in controllable spending. The Department of Expenditure has been ordered to examine the matter's progress,” the notice reads.

The authorities had already barred spending on imported paper for printing books and papers and instructed agencies to decrease the number of consultants they hired.