Sinha calls for boost to capital expenditure

By Our Special Correspondent

NEW DELHI, JULY 3. The Union Finance Minister, Mr. Yashwant Sinha, has called on all Ministries to ensure that capital and productive expenditure was encouraged while restricting revenue expenditure. Addressing a meeting of financial advisers to Ministries, he said this was necessary to bring about a turnaround in the economy.

Expressing concern over the economic slowdown and recent GDP growth figure, he emphasised that financial advisers had a crucial role in ensuring that Government expenditure had a quality attached to it.

In this context, he felt spacing of expenditure also assumed critical importance. He called upon the advisers to avoid a situation in which bulk of expenditure takes place in the last quarter of the year. He also asked them to carefully scrutinise non-plan expenditure of their Ministries as this was essential for the success of the country's economic management.

Mr. Sinha urged them to evolve a definite system of a quarterly review of expenditure projections so that appropriate steps can be taken to monitor and manage expenditure properly.

Regarding the situation where many agencies have huge unspent balances of Plan funds released from administrative Ministries, Mr. Sinha urged the advisers to monitor these on a monthly basis and advise Ministries on release of funds. He felt the situation in which district-level organisations were holding back unused central plan funds while States have a strain on their finances needs to be rectified urgently. ``It is very distressing if the money supposed to reach the people of the country goes from the centre and just gets deposited with these agencies,'' he said.

Emphasising the importance of zero-based budgeting, the Finance Minister urged the financial advisers to ensure that it becomes a reality in the 10th Plan. He felt it was crucial for optimising and containing growth of Government expenditure and utilising scare resources in a more productive manner. He stressed that no ninth plan project would automatically be allowed to graduate to the 10th Plan without rigorous scrutiny.

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