Centre caps expenditures of ministries in Q4 by 3-8%

New Delhi: In view of the fragile financial position, the finance ministry has capped expenditures in the last quarter of the current fiscal under a revised criteria of 3-8 per cent reduction from the existing guidelines and directed all government departments and ministries to restrict within the budgeted expenditures.

Considering the fiscal position of the government in the current financial year, it has been decided to cap the expenditure in the last quarter /last months of the current financial years 2019-20 under the Cash Management System, a Department of Economic Affairs circular said to all ministries.

Expenditure in the last quarter in 2019-20 be restricted to 25 per cent of BE and in the last month of March of the current fiscal it should not be more than 10 per cent of the BE. In case of additional expenditure agreed in Revised estimates stage , such expenses can be incurred only after parliament approval.

The guidelines for cash management in the Q4 and month of the fiscal 20 in last quarter (Jan-March) is 25 per cent of the BE from the earlier 33 per cent of the BE and in the last month of March is 10 per cent of the BE against 15 per cent earlier and in Balance period (Jan-Feb) it will be 15 per cent of the BE against the existing criteria of 18 per cent of BE, said the circular.

Large expenditures will be governed by the expenditure control guidelines in August 2017 which states prior permission of the Bulge division will be required for any single payment in excess of Rs 5,000 crore. The move has been taken to avert any situation of temporary mismatches in cash outflows and inflows and thereby prevent additional transitory borrowing through treasury bills, CMBs and help save interest on expenses.

It would also prevent unnecessary build of cash which creates liquidity crunch in the economy and in the process raises the cost of government borrowings. Cash Management Bills (CMBs) are short term bills issued by the central government to meet its immediate cash needs. (IANS)

Also Read: Vinod Kumar Yadav assumes charge as Railway Board Chairman

Also Watch: Man dies after bike hits electric pole in Chirang District