 "Nirmala Sitharaman, Nirmala, Finance Minister")
The relaxation permitted is subject to strict compliance by all ministries and departments. | Photo: Shutterstock
The Finance Ministry has loosened the guidelines for spending more than Rs 500 crore in order to expedite capital expenditure, which is estimated to be Rs 11.11 trillion for the current fiscal year.
Government spending, which had slowed down for a few months because of the general elections, will gain momentum as a result.
In the budget, Finance Minister Nirmala Sitharaman suggested increasing the capital expenditure target by 11.1% to a total of Rs 11.11 trillion for 2024–2025.
An office letter dated September 2, 2024 stated that it has been agreed to relax criteria for significant releases beyond Rs 500 crore for all categories of expenditure in the current financial year in order to allow the necessary operational flexibility in the execution of the Budget.
All ministries and departments must strictly adhere to the flexibility that has been allowed, the statement stated.
According to the statement, all expenses for both scheme and non-scheme expenditures must adhere to the rules set forth by the ministries’ Monthly Expenditure Plan (MEP) and Quarterly Expenditure Plan (QEP) ceilings, as well as the Single Nodal Agency (SNA)/Central Nodal Agency (CNA).
A May 2022 memorandum stated that in order to facilitate the tracking of expenses and cash flow, amounts between Rs 500 crore and Rs 2,000 crore have to be prepared for release.
To capitalize on the Goods and Services Tax (GST) inflows, the dates for these releases may be limited to the 21st and 25th of a given month.
Similarly, in order to take advantage of the inflow of direct tax receipts, bulk expenditure items valued at more than Rs 2,000 crore were scheduled for the second and final fortnight of the quarter. These conditions will no longer be present.
According to the statement, Financial Advisers will examine and set a freeze on the timing of dividend payments and other non-tax receipts from their respective ministries and departments.
It further stated that the dividend payments and buyback considerations will be concentrated in the first half of the fiscal year.
First Published: Sep 04 2024 | 5:44 PM IST