The Ministry of Finance has decided to put on hold all new schemes till March 31, 2021, The Hindu reported on Thursday. Spending will only be allowed in the Prime Minister’s Garib Kalyan Yojana and the announcements made under the Atmanirbhar Bharat policy, said the ministry.
“In the wake of COVID-19 pandemic, there is unprecedented demand on the public financial resources and a need to use resources prudently in accordance with emerging and changing priorities,” read the memorandum, according to India Today. All central ministries and departments have been asked not to make new proposals for schemes or sub schemes.
The new measure will be applicable on schemes for which “in-principle” approval has already been given by the Finance Ministry’s Department of Expenditure. The move is aimed at tightening the spending amid the coronavirus crisis.
Ten weeks of lockdown has gutted India’s economy. India’s Gross Domestic Product grew at 3.1% for the January to March quarter, the lowest growth rate in 11 years. In the October to December 2019 quarter, the country’s economic growth stood at 4.7% – a seven-year low. However, the final figures released for the third quarter showed that India’s GDP grew at 4.1% during October to December last year.
Data available from the Controller General of Accounts show that the total revenue receipts in April was only Rs 27,548 crore – around 1.2% of the Budget estimate. In comparison, the total expenditure incurred by the government was Rs 3.07 lakh crore – 10% of the Budget estimate. The government has decided to borrow over Rs 4 lakh crore additionally.
Last month, the Centre had announced a Rs 20-lakh-crore economic package to counter the fallout of the coronavirus pandemic. The government’s economic package consists of five portions, focusing on the Micro, Small and Medium Enterprises sector, alleviating the plight of migrant workers, improving agricultural infrastructure and allied industries, coal mining and defence manufacturing and allocations under the Mahatma Gandhi National Rural Employment Guarantee Act.
India is now the seventh most-affected country by the coronavirus in the world. The number of coronavirus cases in India rose to 2,26,770 on Friday morning after 9,851 more people tested positive for the infection in 24 hours. This is the biggest single-day increase in the number of cases. The country’s toll rose by 273 to 6,348.