In a bid to ensure that its austerity drive is taken seriously by central public sector units (PSUs), the government has pinned the responsibility of ensuring that such measures are effective on their chief executive officers. PSUs have also been asked to file a quarterly report on such measures before their respective boards and administrative ministries.
The intent behind the move is to reduce the burden on government resources. The government is likely to have a fiscal deficit of 6.8% of gross domestic product this financial year and is expected to borrow of Rs 4.51 lakh crore from the market.
Although the government has been issuing these austerity measures since the last few years, this is the first time that the finance ministry has asked for a specific cut in expenses. ?As there was no target for reduction earlier, the guidelines were taken as voluntary in nature and not many PSUs observed them. Now, the chief executive officer of each and every PSU will be responsible to ensure that the reduction target is met and all the measures are duly followed,? a senior official in the department of public enterprises (DPE) told FE. A senior PSU official confirmed that the previous guidelines were not taken seriously. ?Accountability of every CEO, coupled with the quarterly review, will ensure better compliance now,? he added.
The DPE, which had asked PSUs to follow the austerity guidelines laid down by the expenditure department last month, has also asked the managements of the PSUs to depute only ?the concerned official? and not ?those at higher levels? for tours. Besides, officials of PSUs will travel only in the economy class, irrespective of the entitlement, if the tour is sponsored by the government.
The department of expenditure of the finance ministry had last month asked all ministries and departments to ensure a 10% cut in non-plan expenditure under the heads of domestic and foreign travel expenses, advertising & publicity and office expenses during 2009-10. It has also prohibited any increase in budgetary allocations under them.
?This time, the government is going to check the compliance of the drive and we have asked managements of all central public companies to file a quarterly report to their respective boards for review of the steps taken. They will also have to file a copy with the administrative ministries,? the official said.
