No new schemes, barring those announced to combat Covid impact, to be funded this year

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

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

According to an office memorandum of department of expenditure in the finance ministry, the changes have been made as there is a need to use resources prudently to be in sync with emerging and changing priorities.

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

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

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

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

The finance ministry has decided not to release any funds for schemes 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..