With COVID-19 cases crossing the 2.26 lakh mark, India today decided not to float new public-funded schemes for the next one year.

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In an office memorandum dated June 4 on ‘Appraisal and Approval of all Public Funded Schemes/Sub Schemes’, the government said it has suspended all new schemes up to Rs 500 crore till March 2021, which had earlier received in-principle approval for FY21.

The government said there is unprecedented demand for public financial resources due to COVID-19 and resources need to be used prudently as per emerging and changing priorities. Hence only schemes announced under Atmanirbhar Bharat Abhiyan and Pradhan Mantri Garib Kalyan Package will be exceptions and will be initiated and continued in FY21.

Expenditure Secretary Somnathan explained to CNBCTV18 the government has not proposed an expenditure cut. However “ministries have been discouraged to propose any new scheme which entails fresh expenditure outside the budget as these will not be approved by the Finance Ministry. In effect this means a ban on floating of new schemes by ministries and departments”, Somanathan told CNBC-TV18.

The concerned ministries will need to send a list of such schemes to the Finance Ministry by June 30.

In contrast, the govt in January 2020 had approved the extension of all continuing schemes till March 2020, subject to the concerned ministries/ departments not changing their scope, nature, coverage, and without creating any additional posts.

The government has also reiterated that the continuation of all such schemes will be based on an outcome review based on the evaluation. The continuing schemes will be further appraised for FY22-FY26 after recommendations of the 15th Finance Commission are accepted and the resource position of the public exchequer is clear.

First Published:Jun 5, 2020 12:35 PM IST