Government enforces austerity drive

NEW DELHI: The government is looking to cut cost wherever possible with departments and ministries asked to reduce hosting foreign dignitaries or travelling abroad to the bare minimum as finance minister P Chidambaram grapples with falling revenues and shrinking investment.

Discussions in government have underlined that rising cost of coal, gas and oil imports are taking a toll on its finances, apart from affecting the balance of payments position. There is a sense of urgency over ensuring that austerity protocols do not remain routine advisories that are not followed.

Ministers and officials have been asked to keep foreign travel to the minimum and the size of entourages is also being examined carefully. The size of delegations has been pruned and the all expenditure requests put to the finance ministry are being scrutinized. So far, Chidambaram has engaged in an exercise to work out the numbers and to get a grip of the overall state of the economy. The current situation in Parliament and frayed ties with allies make any big reform push iffy and the minister indicated he will be looking at an incremental approach.

This will mean a stricter check on non-plan expenditure and crimping elsewhere. It is being suggested that ministries hold back spending unless it is absolutely unavoidable or part of a commitment.