Resource constraint may lead to no new scheme funding in FY21

Government has suspended expenditure on all new and approved public funded schemes and projects of ministries during the current financial year in wake of Covid-19 pandemic that has put unprecedented dem and on public financial resources.

Accordingly, ministries have been told that no new schemes and sub-schemes should be initiated in FY21 excerpt those announced under Pradhan Mantri Gareeb Kalyan package, Atma Nirbhar Bharata Abhiyan package and any other special package and announcement made by the government during the course the year counter adverse impact from coronavirus outbreak.

According to an office memorandum of department of expenditure in the Finance Ministry, the changes has been made as there is a need to use resources prudently in accordance with emerging and changing priorities.

Despite the new economic packages announced by the Centre over last couple o f months, expenditure department has been flooded with requests from ministries seeking ain-principle’ approvals for new proposals and schemes.

As per the finance ministry’s decision, even approved schemes upto Rs 500 crore will remain suspended in FY21 or till further orders, whichever is earlier.

However, all ongoing schemes whose continuation in current fiscal got approval from the finance ministry in January will continue to operate till March 31, 2021 or till the date 15 Finance Commissions recommendations come into ef fect, whichever is earlier. The continuation of these schemes will be based o n outcome review based on evaluation.

The continuing schemes will need to be appraised and approved further for th e period of 2021-22 and 2025-26 after 15th Finance Commission’s recommendations are accepted and resource position of public exchequer is clear, the finance ministry office memorandum has said.

Finance ministry has decided not to release any funds for scheme this year that are not in conformity to its above guidelines. No budgetary provisions will be made available by re-appropriation to such schemes.

An exception to the new austerity measure of the finance ministry can only be made with its specific approval.