No new government schemes for a year, Centre cuts back amid COVID-19 crisis

The finance ministry has asked all ministries and departments not to initiate any new government schemes in the current financial year and said that there is a need to use resources prudently in the wake of the COVID-19 crisis.

The finance ministry has asked all ministries and departments not to initiate any new scheme in the current financial year and said that there is a need to use resources prudently in the wake of the COVID-19 crisis.

However, funds for schemes under the Pradhan Mantri Garib Kalyan Package, the Aatmanirbhar Bharat Abhiyan package, and any other special package or announcement would be allocated, according to an office memorandum by the Department of Expenditure, which comes under the finance ministry.

Also, schemes that are already approved for the current financial year will remain suspended till March 31 next year or further orders. This would also include those schemes for which in-principle approval has been given by the department.

“No new proposals for a scheme/sub-scheme should be initiated this year (2020-21) except the proposals announced under the Pradhan Mantri Garib Kalyan Package, the Aatmanirbhar Bharat Abhiyan package and any other special package/announcement,” it said.

With regard to the existing ongoing schemes, the department said it has already given an interim extension till March 31, 2021, or till the date the recommendations of the 15th Finance Commission come into effect, whichever is earlier.

The government’s move comes after a series of grim economic indicators, including the slowest GDP growth in 11 years and predictions of an economic contraction in more than four decades. India’s credit rating also moved one step closer to junk after Moody’s Investors Service downgraded the nation to the lowest investment-grade level.

Last month, Finance Minister Nirmala Sitharaman had said future fiscal policy actions to stimulate the economy would depend on how COVID-19 pandemic pans out.

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.