The Kerala Government is grappling with a financial crisis as it strives to secure funds for the upcoming Onam season. To tackle the situation, the government has decided to impose significant cuts on expenditures. One measure includes canceling the provision of salary advances typically given during the festive season. Additionally, welfare pension recipients will only receive benefits for two months instead of the usual three.
The Onam season, commencing later this month, is expected to incur an additional expenditure of Rs 8,000 crore. Of this amount, approximately Rs 2,880 crore is needed to pay three months’ worth of arrears in welfare pension.
In light of the severe fund crunch faced by the government this year, the Finance Ministry has issued a circular urging all government departments to reduce their expenditures for the next financial year. The departments have been advised not to increase any non-planned expenditure beyond the current year, except for the salary bill for government employees.
To augment the government’s revenue, the circular instructs departments to report on pending arrears yet to be recovered, along with the reasons for delays and the respective sectors involved. Explanations should be given if loans provided could not be recouped. Any dues a department owes to the government will be allocated only after deducting the amount.
The circular stresses the importance of maintaining accuracy in preparing the budget estimate to avoid later adjustments. If actual expenditures exceed the estimated amount, the reasons for the discrepancy should be explained.
Furthermore, cost-cutting measures are encouraged across all sectors. Non-profitable schemes should be discontinued, and non-urgent repairs deferred. Heads of departments are urged to scrutinize each scheme and minimize expenses where possible.
When winding up a project, employees engaged in it should be re-deployed, and the departments should furnish a list of redundant employees. Each scheme should be carefully evaluated to determine whether it is necessary to continue, and unnecessary schemes should be dropped.
The circular highlights that chief engineers should not seek approval for projects not sanctioned by the government. Recommendations such as purchasing new vehicles should align with the directives on cost-cutting.
Departments must submit estimates of non-plan expenditures before September 5 and plan outlays before September 10, as per the circular’s instructions. These measures aim to address the financial challenges and ensure responsible budget management for the government.
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