Punjab Government increases spending limit for departments, Emphasizes priority areas in budget allocation.

The Punjab government has allowed higher expenditure limits to departments in the first half of the financial year 2023-24 while emphasizing the need to focus on priority areas with social and economic multiplier effects.

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The Punjab government has decided to increase the expenditure limit of its departments in the first half of the financial year 2023-24, encouraging them to focus on priority areas that have a "social and economic multiplier effect" and reduce wasteful expenses. The decision was taken to accelerate the pace of development works and move towards frontloading of expenditure.

According to two officials aware of the development, the state government has allowed its departments to spend up to 50% of their budgetary allocation in the first six months of this financial year. This is higher than the expenditure limit set for the same period of the previous year. The government has also instructed the departments to ensure that the expenditure is incurred within the budgetary allocations approved in the budget estimates (BE) for the current fiscal and take specific clearance in case of any additional fund requirement.

The finance department has sent detailed guidelines on the management of state finances recently to all administrative secretaries and heads of departments. The guidelines state that any expenditure incurred in excess of the budgetary allocation provided in 2023-24 BE without the explicit prior approval of the finance department will entail not only strict disciplinary action against the authority sanctioning such expenditure but also the summary rejection of any proposal for revision of the budget.

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The departments have also been granted more autonomy to plan their expenditure within the approved budget, which will improve the efficiency of their spending. However, they will require prior approval from the finance department for foreign travel, engaging new professionals or service providers, and purchasing staff cars.

The state government has projected growth of 17% in tax revenue and 29% in its own non-tax revenue in the 2023-24 budget. The finance department has instructed all senior officers to meet their tax and non-tax revenue targets, warning that the department, which fails to achieve the targets without "reasonable justification," may face a reduction in its budgetary allocation.


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