Battle Against COVID-19 : Spending Restrictions Imposed On Ministries , Departments By Finance Ministry

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In yet another move the finance ministry has imposed spending restrictions on various ministries and departments in view of revenue constraints caused by the COVID-19 crisis.

Few ministries and departments like health and family welfare, pharma, food and public distribution and AYUSH will get funds as per the Budget, while others like fertilizer, post, road transport, petroleum, commerce and coal will face spending cuts.

“The existing guidelines for expenditure control have been reviewed. Keeping in view the present situation arising out of COVID-19 and the consequential lockdown, it is expected that the cash position of the government may be stressed in the first quarter of 2020-21,” an office memorandum issued by the finance ministry said.

Considering this, it is essential to regulate the government expenditure and fix the Quarterly Expenditure Plan (QEP) or Monthly Expenditure Plan (MEP) of specific ministry or department, it said.

As per the priority, departments and ministries have been categorised in terms of their importance in the present situation. Those falling under category A will get funds as per the approved plan, while those under B and C will witness cut in their expenditure.

Those falling in category A will be guided by MEP or QEP, while B category monthly expenditure may be kept at 8 per cent of Budget Estimate (BE) for 2020-21 for the first month, and at 6 per cent each of BE 2020-21 for the last two months of the first quarter.

For the C category, the departments need to restrict the overall expenditure within 15 per cent of BE of 2020-21.

Some of the important departments falling in this category include corporate affairs, department of investment and public investment management, housing and urban affairs, and labour and employment.

Items of large expenditure would continue to be governed by the guidelines issued by the finance ministry, it said.