The Telegraph
Since 1st March, 1999
Email This Page
Austerity axe falls on cars to cash cows

New Delhi, Sept. 28: The Centre has announced a sweeping austerity drive from October 1 to save Rs 2,000 crore a year.

It has banned the purchase of new vehicles, clamped down on foreign travel by government officials and ordered a 10 per cent mandatory cut in non-plan, non-salary expenditure, including overtime. Besides, no vacant post in government will be filled until a comprehensive review is completed.

Under the 20-point austerity drive unveiled late tonight, there will be a total ban on foreign travel for study tours, seminars and workshops funded by the Centre.

However, foreign travel for participating in annual and other formal meetings of bilateral and multilateral bodies and joint commissions will be allowed by restricting the size of the official delegation. The 25 per cent reduction in foreign travel allowances per day for all categories of employees will continue.

The purchase of all new vehicles by the government will be banned until further orders. However, an exception will be made only to meet the operational requirements of defence and central paramilitary forces. New vehicles will not be purchased even as replacement for condemned ones.

In a move designed to tighten its control over state-run companies, the government ordered all profit-making PSUs to declare a minimum dividend of 20 per cent on equity or a dividend payout of 20 per cent on net profit, whichever is higher.

Oil, petroleum, chemicals and other infrastructure companies will have to declare a dividend of 30 per cent on their net profits. Joint venture companies will have to make concerted efforts to give a 20 per cent dividend on government holding.

The Centre also announced its intention to enhance its stake in profit-making PSUs by directing all of them to consider issuing bonus shares to the government. Although the government has announced that it will encourage the state-owned companies to offload shares in the capital market, this measure will ensure that there is no real dilution of its equity holding.

The government also said there would be no fresh financial commitments on items not included in the budget and pending a review. No additional funds will be provided to any ministry and department at the revised estimate stage.

Email This Page