The government of Tamil Nadu, which is facing a compelling need to regulate expenditure due to rising cost of Covid-19 control measures and falling revenue, has announced a clutch of austerity measures, including a ban on creation of new posts in all departments in the state for a year.
According to an official estimate, the fiscal control measures would help save Rs 700 crore this year. “The government has made a detailed study and is taking necessary action to minimize fiscal stress so that the expenditure on welfare schemes and capital work is ensured to revive the economy,” chief secretary K Shanmugam said in his order.
According to the order, all general transfers, except mutual request transfers, will be on hold. Departments can neither purchase new computers or accessories, except to replace old and dysfunctional systems, nor new vehicles. Leave travel concession — extended to families of employees once every four years — shall stand deferred for all categories of staff and teachers.
When presenting its budget the government had estimated its total revenue receipts to be ₹2,19,375.14 crore for 2020-21. However, with industries across the spectrum recording extremely low incomes and salaries slashed, the government has revised its expectations. Moreover, the need for more spending in the coming months for public health, has forced it to cut down on its own expenditures.
As part of these measures the government has decided to curtail certain avoidable items of expenditure during the current financial year. The government has decided on the cost cutting measures to mobilise resources and the allocations made in the budget estimates for 2020-21 will also be reduced.
The austerity measures are due to the negative impact of Covid-19 on the state finances. At government functions, presentation of mementos, shawls and others will be avoided.
The order had also banned foreign travel programmes at government’s cost and all flight travel within the state unless the cost of airfare is less than or equal to the cost of eligible train fare. The state has recently announced deferment of dearness allowance hike to 2021 and suspension of earned leave encashment.