Budget 2022: the government asks the ministries to limit spending within the prescribed limits

In a bid to keep the budget deficit within the target limit, the Ministry of Finance has instructed ministries and departments to limit their spending with the revised estimates.

The communication comes ahead of the EU budget 2022-2023, which is due to be unveiled on February 1.

In a desk memorandum inviting proposals for the third and final batch of supplementary grant applications, the Ministry of Finance’s Economic Affairs Department asked ministries and departments to submit their proposals by February 10.

“When processing proposals for supplemental grants, the grant review authority should invariably identify the savings available in the grant so that unsuccessful or inflated supplemental applications are eliminated and the possibility of dropout after successful completion of additional subsidy is avoided,” he said.

The proposal for additional grant applications can be screened after a thorough and objective assessment of additional fund requirements, he said.

“All ministries and departments have been asked to contain spending within the approved ceilings of the revised estimate,” he said.

The government estimates a budget deficit of 6.8% of gross domestic product (GDP) for the current fiscal year ending March 31.

The budget deficit is an indication of government borrowing to fill the gap between spending and revenue from taxes and other sources.

The memorandum further stated that the application proposal should be made after a thorough examination of the savings made under the grant.

“In cases where a reappropriation can be made without the requirement of a supplement in accordance with the existing provisions, no additional proposal, including for a nominal amount, should be proposed.

“This requirement can be met by re-allocating savings after obtaining approval from the relevant authority,” he said.

Cases that will be eligible to be incorporated under these applications include those where advances from the Reserve Fund of India have been granted.

In addition, payments against court order will also be included in cases where the Ministry of Finance has specifically advised to move the additional request to the budget session, he said.

The two-phase budget session begins on January 31 and continues until April 8.

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