Government extends austerity drive to autonomous bodies

NEW DELHI: Carrying forward its austerity drive to contain expenditure, the government today restrained autonomous bodies including IITs, IIMs and universities from creating new posts and holding meetings in five-star hotels.

The restrictions, which were imposed on ministries and departments on May 31, 2012, with a view to reducing non-Plan expenditure by 10 per cent as part of austerity drive, have also been extended to government-funded autonomous bodies like trade bodies, educational institutions, medical colleges and cultural organisations.

"...it has been decided to extend the economy measures outlined in the Office Memorandum (OM) dated May 31, 2012 to autonomous bodies funded by the Government of India," a communication issued by Expenditure Secretary Sumit Bose said.

The autonomous bodies are mostly registered as societies under the Societies Registration Act and in certain cases they have been set up as statutory institutions under the provisions contained in various Acts.

As part of the austerity drive, the government had also imposed restrictions on activities like foreign travel, purchase of new vehicles etc.

These directives, issued in the backdrop of economic growth rate declining to a nine-year low of 6.5 per cent in 2011-12, were aimed at cutting non-Plan expenditure by 10 per cent during the current fiscal.

"There is tremendous pressure on government's resources, there is an urgent need for rationalisation of expenditure and optimisation of available resources with a view to improve macreoeconomic environment," the Finance Ministry had said.

The directive to cut non-Plan expenditure by 10 per cent had excluded essential expenses like interest payment, defence purchases, salaries, pension and the grants to states.