Modi Govt Bars First Class Travel, Five-star Hotel Meetings for Officials

India, November 3, 2014 (Newswire.com) - The government on Thursday announced several austerity measures which bans ministers from holding meetings in five-star hotels and traveling in first class of airlines, a move to cut non-plan or discretionary expenditure by 10 percent.

The measures also puts a ban on fresh appointments and filling of posts that have been vacant for over a year.

"While officers are entitled to various classes of air travel depending on seniority, utmost economy would need to be observed while exercising the choice keeping the limitations of budget in mind. However, there would no bookings in the First Class," a statement of the Finance Ministry said.

The government aims to restrict fiscal deficit to 4.1 percent of GDP in 2014-15 and have, hence, taken up such steps, the ministry added.

Under the austerity measures, the ministers have also been asked to use video conferencing as much as possible.

The Finance Ministry also informed that purchase of new vehicles to meet operational requirement of defence forces, Paramilitary forces and security organisations are permitted but ban on purchase of any other vehicles would continue.

"Such measures are intended at promoting fiscal discipline, without restricting the operational efficiency of the government. In the context of the current fiscal situation, there is a need to continue to rationalise expenditure and optimise available resources," it said.

The Finance Ministry said that the "mandatory 10 percent cut" in plan expenditure will exclude interest payments, repayment of debt, defence, capital, salaries, pensions and grants to the state.

"No re-appropriation of funds to augment the non-plan heads of expenditure on which cuts have been imposed, shall be allowed during the current fiscal," it said.

It said the austerity measures would also apply to autonomous bodies, adding that no fresh commitments would be made over and above what was provided in the Budget.

Only seminars and conferences that are absolutely essential should be organised, it said, adding that "holding of exhibitions/seminars/conferences abroad is strongly discouraged except in case of exhibitions for trade promotions."

It said in all cases of air travel the lowest air fare tickets available for entitled class are to be purchased. "No companion free ticket on domestic/international travel is to be availed of," it added.

Referring to jobs in government departments, it said there will be a total ban on new posts and those that have remained vacant for more than a year will not be filled except "under very rare and unavoidable circumstances".

The Finance Ministry has also asked the departments to avoid bunching up expenditure in the last quarter to ensure that there is no infructuous or wasteful spending.

It said the Secretaries would be responsible to ensure compliance of the austerity measures and the Financial Advisors would be required to submit reports to the Finance Ministry on a quarterly basis.

The non-plan expenditure of government deals with outlay on subsidies, interest payment, salary, among others.

For the current fiscal, the government has proposed a Plan expenditure of Rs 5.75 lakh crore, while that for non-Plan expenditure is over Rs 12.19 lakh crore.

Total budgeted expenditure estimates, including Plan and non-Plan stand at Rs 17,94,892 crore, higher than revised estimates for 2013-14 at Rs 15,90,434 crore.