Government has announced measures for fiscal prudence and economy to rationalize expenditure and optimize available resources. This include 10% mandatory cut in the current financial year on non-plan expenditure excluding interest payments, repayments of debt, defence capital, salaries, pension and Finance Commission grants to States. Austerity measures, such as restrictions on holding of meetings and conferences at five star hotels, ban on creation of Plan and Non Plan posts, restriction on purchase of new vehicles, restrictions on foreign travel, observance of discipline in fiscal transfers to States, Public Sector Undertakings and Autonomous Bodies at Central/State/Local level have also been imposed.

In the General Budget 2014-15, fiscal deficit has been estimated to 4.1 per cent of GDP.

The savings likely to be accrued as a result of austerity measures are not centrally monitored and cannot be quantified.

The measures for fiscal prudence and economy are enforced with immediate effect and until further orders.

This information was given by the Minister of State of Finance, Shri Jayant Sinha in written reply to a question in Lok Sabha.

Fiscal prudence measures impose mandatory non-plan expenditure cuts and immediate austerity restrictions on administrative spending. Measures impose an immediate 10% mandatory cut in non-plan expenditure for the current financial year with specified exclusions (interest, debt repayments, defence capital, salaries, pensions, Finance Commission grants). Additional austerity measures restrict creation of posts, vehicle purchases, foreign travel and luxury conferences and tighten discipline in transfers to States, PSUs and autonomous bodies. The measures operate until further orders and reported savings are not centrally monitored or quantifiable.