Austerity drive: Centre bars babus from 1st class travel, 5-star stays

New Delhi: Calling for cutting expenditure, given the current state of the Indian economy and state funds, the finance ministry Thursday asked all government departments to check avoidable spending in areas like five-star hotel spending and first class air travel for officials.

A target of 10 per cent cut in non-plan expenditure has also been set.

In the budget presented in July, the non-plan expenditure was pegged at Rs.12,19,892 crore for the entire fiscal.

"In the context of the current fiscal situation, there is a need to continue to rationalise expenditure and optimise available resources," the ministry said in an office memorandum.

The austerity measures include a bar on government officials from first class air travel on overseas visits, a bar on holding meetings in five-star hotels and instructions to departments to avoid holding seminars abroad.

"There will be a ban on holding of meetings and conferences at five-star hotels except in case of bilateral/multilateral official engagements to be held at the level of minister-in-charge or administrative secretary, with foreign governments or international bodies of which India is a member," the ministry said.

"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 be no bookings in first class," it added.

It recommended, instead, more use of the facility of video conferencing, saying it "may be used effectively".

With the aim to restrict fiscal deficit to 4.1 percent of GDP in the current fiscal, the ministry has also put a freeze on fresh appointments and filling up of posts lying vacant for over a year.

The ministry said purchase of new vehicles to meet operational requirement of defence forces, paramilitary forces and security organisations were permitted but ban on purchase of any other vehicles would continue.