In a signal that the government is worried about the state of its finances, the finance ministry today banned creation of new government posts.
It also announced a host of other measures to reduce expenditure and restrict the fiscal deficit below the limit mentioned in the Budget.
The ministry asked all departments to cut avoidable expenditure, including seminars and conferences at five-star hotels and abroad, purchase of new vehicles, foreign travel and appointment of consultants.
It also sought discipline in fiscal transfers to states, saying unspent balances would be taken into account before further funds were released.
It said there would be a ban on creation of Plan and non-Plan posts, except in new organisations which were set up in the current year based on already-approved schemes.
Expenditure secretary Sumit Bose said the measures were intended to promote fiscal discipline.
He said the departments should submit quarterly reports on action taken on these guidelines.
"In view of the commitment of the government to carry on the process of fiscal consolidation vigorously and to meet the fiscal and revenue deficit targets announced in Budget 2011-12, there is a need for economy and rationalisation of expenditure," he said.
Expressing concerns over bunching up of expenditure towards the end of the financial year, the finance ministry said not more than 33 per cent Budget estimates should be spent in the last quarter of the year.
It said in the last month of the year, payments should be made only for goods and
The government is aiming to restrict its fiscal deficit at 4.6 per cent and revenue deficit at 3.4 per cent of the gross domestic product in 2011-12.
A rising subsidy bill and an economic slowdown threaten to put the government's efforts off-track.
This is the second time in the last three years that the government has taken such austerity measures. The last time such measures were taken was in 2008-09 after the collapse of Lehman Brothers that pushed the global economy into recession.
That time, the finance ministry had asked all departments to cut non-Plan expenditure by 10 per cent.
It had also asked ministers, MPs and officials to avoid traveling executive class on domestic flights, travel executive class on international flights and avoid holding events in five-star hotels.
Now, the budgetary allocation for seminars and conferences has been reduced by 10 per cent and only "absolutely essential" events will be held.
Except for operational requirements of security-related organisations, purchase of vehicles, including those against junked vehicles, will not be permitted.
Foreign travel will be restricted to most necessary engagements and ministries will have to lay down quarterly ceilings for the purpose based on their annual budgets.
The size of the delegation has to be kept to the "absolute minimum" and officers at appropriate levels dealing with the subject will be sponsored instead of those at higher levels.
Even proposals for study tours and workshops abroad will not be entertained unless fully funded by the sponsoring agencies.
