Now, ministries told to put cap on expenditure

New Delhi: In a shift from its earlier practice, the Union finance ministry has issued directions to other Central ministries, putting a ‘ceiling’ on major items of expenditure. Sources said it is for the first time that the finance ministry has fixed an upper limit on expenditure and done away with “plan and non-plan” expenditure, making the Budget more centralised. Sources said the earlier practice allowed ministries to use the allotted money based on priorities.

Now, the ministries will have to specify “schemes and non-schemes” instead of plan and non-plan. “Schemes will include both the ongoing and the newly proposed ones while the non-schemes would mean those that have been stopped or are no longer there,” an official said.

The government’s non-plan expenditure include salaries, subsidies, loans and interest, while planned expenditure pertains to development schemes and other flagship projects as taken up by the government. The Niti Aayog had earlier proposed doing away with the distinction between plan and non-plan expenditure.

While some say that the new move will bring about “systematic financing”, others say this will eventually curtail the Budget-making power that the ministries previously enjoyed.

“With this, the ministries will not be able to manoeuvre much. The flexibility will be gone and it looks more like centralized now,” a source said.

Meanwhile, the social sectors are expecting a huge jump in the Budget this time. The Union health ministry, which has spent nearly 75 per cent of its allotted fund until December 31, is optimistic about the Budget.

“Health sector is receiving a lot of attention, so we are hopeful of getting a good share,” said a senior official.