No new govt scheme for a year as Finance Ministry tightens purse strings

The Union Finance Ministry has asked all ministries and departments to not initiate any new scheme in the current financial year as there is a need to use resources prudently in the wake of the COVID-19 crisis. 

Only funds for schemes under the Pradhan Mantri Garib Kalyan Package, the Aatmanirbhar Bharat Abhiyan package and any other special package or announcement would be allocated, according to an office memorandum by the Department of Expenditure under the Finance Ministry.

Any scheme that has already been approved for the current financial year, including those schemes for which in-principle approval has been given, will remain suspended till March 31 next year or further orders.

The expenditure department said it has been receiving many new proposals for in-principle approval from various ministries or departments. 

"It may be appreciated that in the wake of the COVID-19 pandemic, there is unprecedented demand on public financial resources and a need to use resources prudently in accordance with emerging and changing priorities," it said. 

"No new proposals for a scheme/sub-scheme should be initiated this year (2020-21) except the proposals announced under the Pradhan Mantri Garib Kalyan Package, the Aatmanirbhar Bharat Abhiyan package and any other special package/announcement," it added. 
 
With regard to the existing ongoing schemes, the Department of Expenditure said it has already given an interim extension till March 31, 2021, or till the date the recommendations of the 15th Finance Commission come into effect, whichever is earlier. 

"No funds may be released for schemes that are not in strict conformity to the instructions...nor should budgetary provisions be made available by re-appropriation to such schemes," it said. 

Any exceptions to these guidelines would require the approval of the expenditure department, it added.