NEW DELHI: A day after the “unpopular but unavoidable” hike in fuel prices, Prime Minister Manmohan Singh directed his ministerial colleagues to adopt austerity measures and cut all wasteful expenditure, especially on foreign travel.In a letter to all Union Ministers on Thursday, Dr. Singh said: “As we ask the people to bear some of the financial burden of our oil imports,
it is not only necessary from the resource conservation point of view but also as a moral duty to cut out all wasteful expenditure in our own establishments. I am, therefore, writing to ask you to severely curtail expenditure on air travel, particularly foreign travel, except in cases where it is deemed to be absolutely necessary.”
Reminding them of the huge burden imposed on the government’s financial resources owing to the continuous surge in global oil prices, he said even as it initiated steps to meet this resource crunch and passed on some of the “inevitable” burden to the public, the people must be told in detail the compelling constraints that led to these measures.
“Simultaneously, however, it is equally necessary for us to introduce the utmost economy in our own administrations and establishments. It cannot be denied that there is substantial scope to reduce expenditure on travel and administration,” Dr. Singh said.
No more meetings in five-star hotels
In an immediate response, the Finance Ministry asked all Central Ministries not to hold any meeting in ‘five-star’ hotels and slash non-plan expenditure by up to 10 per cent. “[The] practice of holding meetings and conferences at five-star hotels is to be discontinued,” Expenditure Secretary Sushma Nath told a press conference.
Among the other austerity measures were cuts in overtime allowance, domestic and foreign travel expenses, publications, professional services, and advertising and office expenses. These would help the government save about Rs.6,000 crore this fiscal. A mandatory five per cent cut in expenses could also be achieved by not raising the budgetary allocation under non-Plan expenditure heads, she said.
The government would adhere to the fiscal deficit target in 2008-09, despite the increased burden on account of oil subsidies, Ms. Nath said.
In his letter, the Prime Minister sought the “fullest cooperation” from his colleagues “in [this] matter of importance and urgency” and said: “This economy may be made applicable immediately for your own self and also for all senior functionaries in your Ministry. While instructions will be issued to the Cabinet Secretary to introduce more rigorous scrutiny of foreign travel proposals, the best prudence can be exercised at your own level with regard to both foreign and local travel for you and your officers.”
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