Government changes expenditure pattern for Q1 FY20-21, categorises ministerial departments


New Delhi: The central authorities on Wednesday (April 8) determined to alter its expenditure pattern, and the Ministry of Finance made classes of ministries as A, B, C for their departments amid the outbreak of coronavirus COVID-19 pandemic, mentioned a authorities assertion. 

The Finance Ministry has come out with a tenet on this regard. Under the rules, the federal government will management its expenditure within the first quarter (April to June 2020) of this monetary yr.

Under A class, the departments can be authorised to spend cash allotted within the price range. This contains Agriculture, Yoga, Health, Civil Aviation, Consumer Affairs, Food, Railway and Rural ministry.

Under B class, these departments must curtail their expenditure by 20%, and they’re: agriculture analysis, fertilizer, defence, tax, police, petroleum, street transport and so on.

The departments below C class should spend merely 15% of their allotted quantity within the first quarter. It contains Chemical, Coal, Corporate Affairs, Civil Defense, Animal Husbandry, Power, Tourism, and Higher Education.

Notably, main expenditures can be maintained in response to the predetermined pointers.

Meanwhile, the Finance Ministry has allowed all states immediately to borrow a cumulative Rs 3.20 lakh crore from the market between April-December. The transfer comes amid states’ demand for larger funds from the Centre to satisfy the bills in coping with COVID-19 pandemic.

In a letter to the RBI, the ministry reportedly said that the Centre has determined to allow states to boost open market borrowing on the premise of 50 per cent the Net Borrowing Ceiling mounted for the yr 2020-21 for financing the states’ annual plan for the fiscal.

As per the letter by the Department of Expenditure to the RBI, 28 states have been allowed to borrow a cumulative Rs 3,20,481 crore from markets on an ad-hoc foundation for the primary 9 months of the present fiscal.

On Tuesday, the Reserve Bank of India permitted state governments and Union territories (UTs) better flexibility for availing overdraft amenities with quick impact until September 30. 

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