Covid-19 austerity measures: Chandigarh admn slashes expenditure by 20%

The UT administration has slashed budget estimates of 2020-2021 by 6% to 8% from July to September, reducing expenditure by 20% in the second quarter of fiscal 2020-2021 to cope with the steep fall in revenues following the Covid-19 lockdown, it was announced on Friday.

The measures apply to all departments and entities getting UT grant-in-aid, including the municipal corporation (MC).

The UT finance department issued fresh directions imposing strict restrictions on spending of allocated expenditure. For the next three months, there will be a cut in budget estimates of 2020-2021 by 8% in July, 6% in August and 6% in September. In total, for the second quarter of fiscal 2020-2021, the administration’s expenditure will be reduced by 20%.

Two months of lockdown has cost UT Administration a whopping ₹342 crore in tax collections. “The revenue generation from goods and service tax (GST), excise and VAT plummeted by 71% for April and May in comparison to the same period last year. The MC is running a fiscal deficit for 2020-2021. The directions are also in line with the Central government guidelines,” said a senior UT official who did not want to be named.

Development works to be impacted

The administration has ordered the UT engineering department to focus only on completing ongoing projects. Other projects can only be taken up if approved by the administration as priority.

Financial bids of only those projects will be opened which have been approved by higher authorities. The department has also be asked to give priority to clearing pending bills instead of making payments for new works subject to availability of funds during the quarter.

Ban on new recruitments

There will be a moratorium on new recruitment, except for ongoing processes. The DC rates (wages fixed by district collector) of all outsourced employees have also been frozen.

Strength of contractual and outsourced employees will not be increased.

There is complete ban on the leave travel allowance (LTA) and purchasing of new vehicles.

UT has directed that amounts that remain unspent in a month/quarter will not be carried forward for the next month/quarter.

The administration has also asked the UT electricity department to exempt government departments from late payment surcharge on electric bills.

The departments have been directed not to operate office expenses and other charges under expenditure heads.