The Union Government has made a strategic decision to curtail wasteful expenditure on various activities and services like travel, food and conferences by 20%. This significant move was made during one of the recent meetings held by the Cabinet Committee on Investment and Growth (CCIG). The CCIG, a newly established cabinet committee, came into existence in June 2019 under the leadership of the Prime Minister.
The Aim of the Decision
The main intent behind this decision is to avoid any fiscal deviations by restricting non-development expenditure and maintaining the fiscal deficit within the budgeted target of 3.3% during the financial year 2019-20. It acts as a strategic measure to ensure better resource allocation and optimization.
Previous Austerity Measures
This isn’t the first instance where the government has implemented austerity measures for better fiscal management. One such example from the past is from October 2014, when the government asked for a reduction in non-plan expenditure by 10%. These kinds of austerity measures are taken with an aim to promote fiscal discipline, without compromising on the operational efficiency of the government.
Contextual Need for Rationalization
Given the current fiscal situation, there is an imperative need to rationalize expenditure and make optimum use of available resources. The primary focus is to eliminate unnecessary expenditures and channel those funds towards more productive uses that can contribute to economic growth and development.
Facts & Figures
| Years | Fiscal Deficit Target (%) | Austerity Measure Introduced |
|---|---|---|
| 2019 | 3.3 | 20% reduction in expenditure on travel, food, conferences |
| 2014 | Not Available | 10% cut in non-plan expenditure |
Cabinet Committee on Investment and Growth (CCIG)
The CCIG, formed in June 2019, plays a crucial role in deciding and implementing such fiscal measures. Chaired by the Prime Minister, this committee is responsible for formulating and executing strategic decisions aimed at promoting investment and triggering growth.
