Finance Ministry relaxes spending rules to increase spending in the last quarter

Domestic auto components industry expected to see 15-17% revenue growth this fiscal year

It has now been decided to relax the upper limit of 33 per cent of the BE as applicable for the last quarter of the current financial year as a one-time measure, the Department of Economic Affairs under the Finance Ministry said in an office memorandum.

In a bid to spike capital expenditure, the Finance Ministry has relaxed spending norms for the final quarter so as to help financial exercises dialed back because of the impact of COVID-19. According to the existing guidelines, more than 33% and 15 percent of the budget estimates (BE) will be admissible to be spent by ministries and departments in the last quarter and last month of the financial year, separately. The relaxation is applicable with quick impact for the current financial year or until additional order.

This is subject to the condition that the ceiling of revised estimate (RE) for 2021-22 is not exceeded, the memorandum dated January 19, 2021 said.

“For the items of capital expenditure, the ceiling of 15 per cent of the BE in the last month for this fiscal is also relaxed, provided the capital or overall expenditure is within the RE 2021-22 ceiling,” it said.

In view of relaxation, ministries and departments have been asked to carry out consequential modifications in their quarterly expenditure plan (QEP)/monthly expenditure plan (MEP).

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