TNN

New Delhi, Jun 6: Following Prime Minister Manmohan Singh's suggestions to curtail wasteful expenditure, the finance ministry on Thursday directed central ministries not to hold any conferences in luxury 5-star hotels and cut non-plan expenditure by up to 10%.

The government has been forced to tighten its belt to control the expenditure as the gap between projected revenues and expenditures for 2008-09 is likely to widen beyond the estimates made in the Budget, following the extra liabilities due to the acceptance of sixth pay commission, waiver of farm loan and increased subsidies on fertilizers on the one hand and forgoing of revenues because of the duty cut on crude and petroleum products on the other hand.

"Practice of holding meetings and conferences at 5-star hotels is to be discontinued," expenditure secretary Sushama Nath said on measures to be taken by all central ministries to cut back expenses. The measures, including cutting down on overtime allowance, domestic and foreign travel expense, publications, professional services, advertising and office expenses, would help the government save an estimated Rs 6,000 crore in the current fiscal.

Nath said the government would stick to fiscal deficit target in 2008-09, despite increased burden due to oil subsidies. She said that measures are intended at promoting fiscal discipline without restricting the operational efficiency of the government. The ministries have been asked not to announce any new schemes in the current fiscal, apart from those cleared in the Budget for 2008-09.

The expenditure secretary also said that the remaining portion of the non-plan expenditure excluding interest payment, repayment of debt, defence capital, salaries, pension and the Finance Commission grants to the states would be subjected to a mandatory 5% cut. She said that additional expenditure over and above the prescribed approved ceiling for existing schemes will not be permitted and any amendment to a scheme is to be accompanied with matching savings.

A 10% cut in the budgetary allocation for seminars and conference has also been announced by Nath. She said ministries and departments have also been advised to take advantage of the increasing competition in air travel schemes offering discounts to contain expenditure on air-travel. To implement these measures, monthly and quarterly review meetings would be held by department secretaries and cabinet secretary respectively, she added.