Kerala to tighten purse strings, targets uneconomical schemes ahead of budget

The Finance department has directed the heads to identify uneconomical schemes and stressed the need for austerity ahead of preparation of state budget 2027-28.

According to a circular issued by the Finance Department, the financial constraints faced by the State Government make austerity imperative. It also notes that adhering to the principle of retaining the revenue budget at the current year's revised estimate level will require greater economy in other spheres of activity.

According to the circular, budget estimates for expenditure must be prepared as accurately as possible to ensure that the amounts proposed for each function, programme or scheme do not later prove to be either excessive or inadequate.

It also calls for the revised estimates for the current year to be used as the basis for preparing the budget for the upcoming financial year, while making due allowance for any special factors. It adds that proposed increases in expenditure will be considered only if the variations between the revised estimates and the budget estimates are clearly and precisely explained in the remarks column.

The circular also refers to the Public Accounts Committee's (2014–16) 90th Report, which states that the previous year's excess expenditure and savings must be taken into account while formulating budget estimates for subsequent years.

For schemes involving expenditure under more than one head, full details of the provisions proposed under the other heads must also be indicated in the remarks column to provide a complete picture of the financial requirements, the circular notes. The explanation of the scheme should also cover all components of the proposed expenditure.

The government has also called for the discontinuation of uneconomical schemes and the deferment of certain measures, including maintenance expenditure that can be postponed. It has also entrusted the heads of various departments with identifying areas where downsizing can be carried out.

According to the circular, surplus staff arising from such downsizing cannot be retrenched. However, the officer concerned has been entrusted with preparing a list of such employees so that they can be redeployed when vacancies arise in the future.

The circular also directs the heads of all departments and other estimating officers to take immediate steps to formulate the budget estimates for the financial year 2027–28.