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Government steps up vigil on expenses

P Vaidyanathan Iyer

The expenditure department is getting back to serious business. With the government's net borrowings already crossing the 50 per cent mark and revenue realisation showing early signs of slowdown, the department has moved into top gear.

Talking to Business Standard, a top official said the department will make all-out efforts to cut through the rigidity in the over Rs 3000-billion expenditure budget of the country.

"The first round of meetings with various departments and other ministries on their quarterly budgets is slated for the next fortnight," he said. The effort is to make small savings across the board, he added.

According to officials, given the rigidities of government expenditure it was not quite possible to make huge savings under any one particular head.

"However, unnecessary expenditure can be identified and weeded off if one goes through the budgets of various ministries periodically with rigour," they said.

The quarterly meetings of the expenditure department with various ministries and departments were conceptualised and put to practice for the first time in 2000-01.

These meetings will be streamlined further during the current fiscal so that they achieve the desired outcome of cutting down on avoidable expenses.

On the non plan expenditure front, while the food subsidy bill is likely to shoot up in the current fiscal, the government hopes to save at least Rs 10 billion primarily because of the reduced cost of market borrowings and another Rs 15 billion from the cut in small savings rate.

The government, which saved over Rs 60 billion on defence last fiscal will however find it difficult to cut down on defence expenditure this year.

Of the government's expenditure squeeze of Rs 159.13 billion during 2000-01, defence savings amounted to Rs 60 billion, savings on interest payments Rs 33 and plan funds Rs 27 billion. The balance Rs 40 billion of the total savings came from various ministries and departments in small quantums.

Officials said the savings in various ministries though in small quantities contributed significantly to the overall savings. "It is here that better expenditure management through zero base budgeting and other tools plays a vital role," they said.

The government had extended ZBB to all schemes, both at the central and state levels last fiscal. It has further identified centrally sponsored schemes, which can to be transferred to the states now. "ZBB will be adopted for all these schemes too," sources said.

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