Highlights:
- The government announced no new schemes will come out for 1 year
- Spending will be done only in PM’s Garib Kalyan package and other announcements made under AtmaNirbhar Bharat
- Ministries have been told to stop requesting for new schemes to the Ministry of Finance
The Union Ministry of Finance, today, announced that there will be no new Government schemes coming out for 1 year, this is being done to restrict the spending amidst the rising cases of COVID-19 in the country.
All ministries have already been told to stop sending requests for new schemes to the Finance Ministry.
The Ministry of Finance said that the spending will be restricted to only the Prime Minister’s Garib Kalyan package and the announcements which were made under the AtmaNirbhar Bharat package. No other scheme will be given approval this year.
The finance ministry said, “It may be appreciated that in the wake of the COVID-19 pandemic, there is an unprecedented demand on public financial resources and a need to use resources prudently in accordance with emerging and changing priorities,”.
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Additionally, it has been said that the schemes which were already approved under the Budget will also stay suspended till March 31.
The note from the finance ministry said that any exception to these new rules will need to be approved by the Department of Expenditure.
The decision from the government has come after a series of negative economic indicators which includes the slowest GDP growth India has seen in 11 years along with the predictions of economic contraction in over 4 decades.
What could also be the final nail in the coffin is the negative rating from Moody’s Investors Services which downgraded India to the lowest investment grade.
In May, Nirmala Sitharaman, Union Finance Minister said that the future fiscal policy to stimulate India’s economy will depend on the pandemic pans out. As of now, the Indian government has already announced packages worth Rs. 20.97 lakh crore, which also includes RBI’s Rs. 8.01 lakh crore worth of liquidity measures which lasted until 17th of May.
The country has seen record spikes in the number of coronavirus cases over the past few days. In the biggest daily rise, India recorded 9,851 cases and 273 deaths in the last 24 hours. The number of cases in the country has climbed to 2,26,770. India is now the seventh worst-hit nation after the US, Brazil, Russia, the UK, Spain and Italy.
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