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Ministries to face expenditure cut to cope with the crisis

By IndianMandarins- 09 Apr 2020


In view of revenue constraints caused by the COVID-19 crisis, the Union finance ministry has imposed spending restrictions on various ministries and departments. Ministries like health and family welfare, pharma, food and public distribution and AYUSH will get funds as per the Budget but fertilizer, post, road transport, petroleum, commerce and coal will face a cut in their spending.
Actually the existing guidelines have been reviewed keeping in view the present situation. It is likely that the cash position of the government may be stressed in the first quarter of 2020-21. So it becomes necessary to regulate expenditure and fix Quarterly Expenditure Plan (QEP) or Monthly Expenditure Plan (MEP) of the specific ministry.
They have been categorized in terms of their importance. Those falling under category A will get funds as per the approved plan, while those under B and C will have to undergo 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 percent of Budget Estimate (BE) for 2020-21 for the first month, and at 6 percent 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 percent 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 labor and employment. They have been advised to observe guidelines strictly and regulate the expenditure.

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