Nothing new about austerity drive, says FM

There’s nothing new about the austerity drive in the government, though not many ministers and bureaucrats may have paid attention to it in the past, finance minister Pranab Mukherjee said on Friday.

“Austerity (in the government) has been a standing instruction of the finance ministry for quite some time,” Mukherjee told journalists at the Indian Women Press Corps in the capital, but added that the instruction was not adhered to strictly as the economic conditions were comfortable till a few months ago.

Earlier this week, the finance ministry issued a fresh directive to all ministries and government departments on reducing expenditure in view of the continuing economic slowdown and drought conditions in many parts of the country.

Many ministers are believed to have objected to these directives (mainly to the norm on flying economy class) in the Cabinet meeting on Thursday.  According to Mukherjee, his ministry has added just two extra points this time —- one on limiting expenses on travel and another on cutting cost while hosting conferences and seminars.

Executive class should be avoided while traveling domestic, the ministry has suggested, thereby indicating ministers and bureaucrats should fly economy class. As for international travel, first class should be avoided, but they can fly business class, Mukherjee said.

While the government wants a ban on five star conferences and seminars by ministries, Mukherjee said the hotels can be used for hosting visiting foreign dignitaries. Since most government ministries and departments have world-class conference facilities, there’s no need for five-star hotels for the same, he said. Most parliamentary committee meetings should be held in Delhi from now on so that the expenditure on travel and accommodation is minimal, he added.

To a question on the issue of West Bengal government failing to give land to IT majors Infosys and Wipro for setting up a campus, Mukherjee said, “I will speak to the state government to see that they are allotted appropriate land.” Infosys and Wipro wanted to set up a campus in Rajarhat, a satellite township near Kolkata.

On the proposed insurance bill, he said, “We are committed to financial reforms,” but did not give any timeline for introducing the draft bill in Parliament. On the growth rate the next quarter, Mukherjee said the impact of drought could be felt in the second quarter.

“Therefore, I cannot be sure whether the growth rate will move up or not in the second quarter,” he said. The third and the fourth quarter are expected to be much better, he added.