The Hindu : National : Cut spending, Chidambaram tells Ministries

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Wednesday, May 18, 2005

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National

Cut spending, Chidambaram tells Ministries

Special Correspondent

To ward off slippages in FRBM

NEW DELHI: Finance Minister P. Chidambaram on Tuesday asked ministries to curb expenditure as part of the Centre's efforts to reduce fiscal and revenue deficits.

At his first meeting after the 2005-06 budget presentation and fourth since the United Progressive Alliance Government assumed office, Mr. Chidambaram had a 90-minute discussion with the Financial Advisers of all ministries and departments on controlling expenditure.

This exercise, according to Finance Ministry sources, is being carried out to ward off slippages in FRBM (Fiscal Responsibility & Budget Management) targets arising out of overspending by the Government.

The Finance Ministry was considering an innovative "Exchequer Control" scheme to bar ministries from withdrawing money from banks beyond a "pre-set limit" for a "specified period."

The move is said to be part of the reform measures put in place to curb overspending and bunching of expenditure so as to contain the fiscal deficit below 4.3 per cent of the GDP in 2005-06, as pegged at in the budget.

The Finance Ministry would discuss the scheme with various ministries and the Reserve Bank of India before finalising its modalities.

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