India Announces Austerity Measures to Contain Fiscal Deficit

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India’s finance ministry on Wednesday announced a ban on five-star venues for government meetings; foreign locations for conferences, exhibitions and seminars; and executive class airline tickets for officials.

A finance ministry circular on Wednesday pressed officials to keep the size of delegations going abroad at an “absolute minimum.” It also banned recruitment for central government posts for one year and the purchase of new vehicles.

The austerity measures are aimed at helping India’s flailing economy, which has been struggling to gain ground over the past few months.

“Such measures are intended at promoting fiscal discipline, without restricting the operational efficiency of the government,” a finance ministry statement said of the small-bore restrictions.

The ministry is hoping the measures — which include a 10% cut in non-plan expenditures, but exclude interest payments, repayment of debt, the defense budget, salaries, and pensions — will help to restrict the fiscal deficit to 4.8% of the GDP in 2013-14.

India’s finance ministry announced similar austerity measures in November last year, which helped it contain the fiscal deficit at 4.9% of GDP.

MORE: In India, Gold Glitters but Brings Economic Woes

9 comments
vaishnavjagdip
vaishnavjagdip

What is required is [1] Control rampant corruption [2]  control cost overrun due to delay in implementation of projects

 [3] one side ,Govt to reduce subsidy burden, increases price of essential items like petrol, diesel, kerosene,  which triggers inflation ,reduces purchasing power [4] Govt has yet not sincerely .honestly tries to bring back black money lying in foreign Banks [5] Govt is utterly failed to recover any amount from nabbed on charges of big scams, billions of public money got siphoned off

vaishnavjagdip
vaishnavjagdip

One side Govt has announced austerity measures ,otherside has allowed bureaucrats to travel to foreign countries for medical treatment, declared increase in dearness allowance to 5 las govt employees, got approved food security bill which shall add subsidy burden

Govt has done nothing as regards to bringing back black money lying in foreign Banks, Govt has yet not recovered anything from nabbed on charges of big scams, govt is failed to control rampant corruption.

Important files related to scams gets misplaced, so to make the case weak

ISLANIYA
ISLANIYA

@12vinita @TIME 1st time predicted Econ'y is going down.This is just cosmetic measure,we will see no change,1 Min.needs 24 car on road?

meetdheeraj
meetdheeraj

@TIME @TIMEWorld Who in the world is foolish enough to believe this! India is a type of nation where things as this occur only on paper...