Delhi, Jun 05, 2020: No new government schemes will start for a year, the Finance Ministry said today, in a move to tighten spending amid rising coronavirus cases.
All ministries have been told to stop sending requests for new schemes to the finance ministry, NDTV reported.
Spending will only be allowed in the Prime Minister’s Garib Kalyan Package and the announcements made under the Atmanirbhar Bharat package recently. No other scheme would be approved this financial year, said the ministry.
"It may be appreciated that in the wake of the COVID-19 pandemic, there is an unprecedented demand on public financial resources and a need to use resources prudently in accordance with emerging and changing priorities," a finance ministry note said.
Schemes already approved under the Budget will also stay suspended till March 31.
The note also said any exception to these new rules would need to be approved by the Department of Expenditure.
The government’s move comes after a series of grim economic indicators, including the slowest GDP growth in 11 years and predictions of an economic contraction in more than four decades. India’s credit rating also moved one step closer to junk after Moody’s Investors Service downgraded the nation to the lowest investment grade level.
Last month, Finance Minister Nirmala Sitharaman had said future fiscal policy actions to stimulate the economy would depend on how COVID-19 pandemic pans out.
The government has already announced a Rs 20.97 lakh crore economic package, which includes Reserve Bank of India’s Rs 8.01 lakh crore worth of liquidity measures till May 17.
The country has seen record spikes in the number of coronavirus cases over the past few days. In the biggest daily rise, India recorded 9,851 cases and 273 deaths in the last 24 hours.
The number of cases in the country has climbed to 2,26,770. India is now the seventh worst-hit nation after the US, Brazil, Russia, the UK, Spain and Italy.