Austerity drive to cap provincial expenditures

As the economic slump continues, the govt has decided to limit spending to prevent exceeding set budget

LAHORE:

In consideration of Punjab’s financial situation, the government has decided to extend its austerity drive to the current fiscal year. With the measure in place, the government hopes to curb additional expenditures and maximise savings in order to prevent the province from going for supplementary budget. In this regard, the provincial finance department has also issued a summary to the Punjab Chief Minister Sardar Usman Buzdar, which is expected to be approved upon return from Eidul Azha holidays.

According to financial experts, the provinces are required to limit their expenditures within the budget for the current financial year, in addition to reporting surplus. Thus, much like other provinces, Punjab too is avoiding additional expenditures. Furthermore, as per the summary sent for approval in the financial year 2020-2021, the Punjab Finance Department will approve not be approving any supplementary grants for the government departments. “The departments will be required to spend within their purview. If any department is in need of funds, it will have to get an approval from the provincial cabinet and the standing committee on cabinet finance. However, for this, funds will only be sanctioned in areas where it is an absolute necessity.”

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In the same vein, the new austerity policy has also indicated that under the current situations, government expenses will no longer be used for financing ministers and members of the provincial assembly going abroad. Nevertheless, if such a foreign tour is indispensable, it will be subject to the recommendations of the austerity committee and need a formal approval from the provincial chief minister. Furthermore, if an assembly member or a government employee is required to go on an official visit, they will be travelling in the plane’s economy class. Similarly, there will be a complete ban on medical treatments abroad, and special cases, if any, will also require the approval of the chief minister. To curb expenditures further and only spend what’s entirely necessary, there will also be a complete ban on purchase of vehicles, be it imported or locally made, by the government department. Yet, if a vehicle has to be purchased, it too will be subject to the chief minister’s approval.

On the other hand, in view of Covid-19, funds will still continue to be provided to the health department without any restrictions. In addition, approval of the chief minister will however be required for the procurement of ambulances and coasters for hospitals and educational institutions. Moreover, the repairs of the houses of the provincial ministers and their discretionary powers have also been suspended in a bid to minimise expenditures during the current financial year. Similarly, no new requests for air-conditioning will be entertained until review and approval of the austerity committee. Restrictions have also been applied on new recruitments in the government departments, whereas all new staff, if any, is to be required on strictly need basis. By the same token, the ban on upgradation of government posts will also remain in place this financial year. Similarly, events with government funds and publicity for any events will not be given beyond absolute needs. That being said, the Punjab government will still continue to provide funds to deal with disasters like Covid-19, floods and dengue, without any obstructions.

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Speaking to The Express Tribune, a source privy to the development shared that the finance department has already issued instructions to the government agencies that expenses have to be made within the scope of the budget. Thus, if agency demands a supplementary budget, it will not be approved. “In this regard, the departments of health and education have been given a budget of three months while the rest of the government departments have a budget of one month. Whereas, according to government departments, they had to face a lot of financial difficulties in the last financial year as well. It was largely due to not being given an extra budget and expenditures have also been restricted to a significant extent this year,” the source informed.

Published in The Express Tribune, August 4^th, 2020.