Govt extends 20% expenditure cap to Q2; addl 10% for 4 depts

JAMMU: In order to regulate expenditure in testing and financially-straining times of Coronavirus, the Jammu and Kashmir government on Wednesday decided to extended the cost-cutting policy for further three months, as it capped the overall expenditure by its departments in the second quarter of the current fiscal to 20% of the budget estimates.
Usually there is cap on expenditure to the tune of 30% only in the last quarter of a fiscal, so as to avoid the rush of expenditure as department spend money allotted to them fearing the lapse of funds at the end of the financial year.
However, earlier this year, probably for the first time that the government had put a restriction on spending in the first quarter of any fiscal i.e. from April 1 to June 30 2020, asking the departments to restrict the overall expenditure within 20 per cent of budget estimates, 2020-21.
“This is ordered in the wake of prevalent situation due to Coronavirus outbreak,” said a circular issued by Financial Commissioner, Finance Department, Arun Kumar Mehta.
On Thursday, Mehta extended the earlier guidelines for second quarter as well i.e. from July to September 2020.
“The Departments are required to restrict the overall expenditure within 40% of Budget Estimates 2020-21 upto ending September, 2020,” he said.
“The expenditure on all non-salary heads of Revenue Budget shall be restricted upto 20% of the BE for Q2 with overall expenditure up to 40 % of BE by ending September, 2020,” the order said.
“The expenditure under Capex Budget in respect of 'on-going' works and 'non-construction' activities shall be restricted upto 40 % of BE 2020-21 by ending September, 2020 except in case of PW (R&B), Rural Development, Power Development and Jal Shakti Departments,” it said, adding that these four Departments can incur expenditure up to 50% of BE by ending September, 2020 and are also permitted to initiate works within full budget approved for the financial year 2020-21.
The government also issued a series of guidelines to maintain the expenditure limit during this period, saying that the employees will only get their regular salaries including Child Education Allowance, while the payment in respect of salary arrears, LTC, Leave encashment, would not be made in Q1, without prior consent of Finance department.
“The transport allowance shall not be drawn in respect of employees who have not attended the office during the lockdown period,” said the circular.
The government also restricted the advance payment for medical treatment to emergency cases only, and office expenses to only committed liabilities which cannot be avoided.
No expenditure would be incurred on the accounts of RRT, Publication and other charges, the circular said, adding that the wages and professional services for outsourced manpower would not exceed 25% of the budget in first quarter.
Restricting the expenditure on other non-salary heads including minor works, GIA, the government made the consent of Finance department a prerequisite.
“In case of Capex/Plan budget, expenditure on essential activities can be initiated after the formulation of plan and uploading the work wise activity on the BEAMS with prior approval of Finance department,” said the circular.
However, it has kept a number of items of expenditure within the overall authorisation of funds out of the bounds of restriction. These include Wages/Honorarium/Stipend/Scholarship/Compensation and Beneficiary oriented schemes of social welfare and other departments, Leave encashment claims of current fiscal upto ending June 2020, Medical Reimbursement claims, Telephone charges, RRT/Electricity charges of the current fiscal.
There would be no cap on Diet and Drugs and Instruments/ M&E/M&S in respect of Health and Medical Education Department, Feed/Fodder/Drugs in respect of Animal/ Sheep Husbandry and Fisheries Departments, Procurement of Food Grains in respect of Food, Civil Supplies and Consumer Affairs Department and Disaster Response Fund related expenditure also.