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Covid imposes spending curbs on ministries

The coronavirus is forcing various ministries to be thrifty as Centre has tightened expenditure for the first quarter of FY21 and prioritised frontline spending to combat the pandemic. On April 8, the Finance Ministry categorized ministries/departments into 3 groups and restricted expenditure of several of these to within 15-20% of that budgeted for FY21 in the April-June quarter.

Category-A ministries and departments will operate under the existing guidelines without any restrictions. It includes critical ministries to combat the Covid-19 outbreak — health, pharmaceuticals, consumer affairs, AYUSH, textiles, rural development, railways and civil aviation. It also encompasses interest payments, transfers to states, the Supreme Court, the Central Vigilance Commission, the Union Public Service Commission and the staff, household and allowances of the President.

Category-B ministries will have to restrict overall expenditure to “within 20% of BE 2020-21” in the first quarter. It encompasses external affairs, home, cabinet, posts, fertilisers, road transport, defence pensions, the departments of revenue and financial services, the petroleum ministry, transfers to Union Territories, the Lok Sabha, the Rajya Sabha and the secretariat of the Vice President.

Category C has to restrict expenditure to within 15% of that budgeted. This group includes telecom, commerce, electronics and information technology, environment, animal husbandry, food processing, human resources development, labour, drinking water & sanitation and law.