Cutting expenditure to contain fiscal deficit: Chidambaram

The government has taken steps to cut expenditure, including a ban on holding meetings and conferences in five-star hotels and restrictions on foreign travels, to restrict the fiscal deficit at 5.3% of the gross domestic product in this financial year, Finance Minister P. Chidambaram said on Thursday.

The government has decided to mandatorily cut the non-plan expenditure by 10% in the current financial year, Chidambaram said in written reply to a question in the Rajya Sabha.

The finance minister said the government has put a ban on holding of meetings and conferences at five-star hotels and creation of plan and non-plan posts.

The government has also put restrictions on foreign travel and re-appropriation of funds and would observe discipline in fiscal transfers to states, public sector undertakings and autonomous bodies.

“Releases to any entity shall be based on furnishing of utilisation certificates,” he said.

The government has advised ministries, departments against making advance payments for the goods and services being procured.

Chidambaram said the government also endeavours to restrict the expenditure on central subsidies in a bid to contain the fiscal deficit.

The finance minister has set a target to contain fiscal deficit at 5.3 percent of the country's gross domestic product (GDP) in the current financial year as compared to 5.8 percent recorded in 2011-12.

The government recently outlined a road map for fiscal consolidation that target to cut fiscal deficit to three percent by 2016-17.