Over-burdened with falling revenues due to the Coronavirus pandemic and the subsequent lockdowns, the Centre has decided to tighten its purse strings.
The Finance Ministry on Friday said that no new government schemes will start for a year, apart from the special packages announced by Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman to tide over the impacts of COVID-19.
With this move, only PM Gareeb Kalyan package and the Aatmanirbhar Bharat Abhiyan package will be in function till March next year.
The Government has stopped the launch of any new scheme worth up to Rs 500 crore, till March 2021. Schemes already approved under the Union Budget will also remain suspended till March 31.
Also, all ministries have been asked to stop sending requests for new schemes to the finance ministry.
“No New Scheme/Sub Scheme, whether under delegate power to ministry including SFC proposals or through EFC should be initiated in 2020-21 except proposal announced under PM Gareeb Kalyan Package, Aatma Nirbhar Bharat Abhiyan Package and any other special packages,” the Finance Ministry said in a statement.
“In-principle approval for such schemes will not be given this financial year. Initiation of new schemes already appraised/approved will remain suspended for one year till march 31, 2021 or till further orders whichever is earlier,” it said.
“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,” the ministry added.
Prime Minister Narendra Modi had on May 12 announced the most anticipated stimulus package of Rs 20 lakh crore, nearly 10 per cent of country’s GDP, for all segments including industries, workers, farmers, honest taxpayers, MSMEs, cottage industry and others.
While announcing the same, PM Modi had said that the special economic package would be the primary component of “Aatmanirbhar Bharat (self-reliant India)”. He said the package will focus on land, labour, liquidity and laws. It also includes the monetary easing announced by the Reserve Bank of India (RBI).