The Finance Ministry has prohibited all government ministries and departments from putting forward new schemes in FY21, except those under the Pradhan Mantri Garib Kalyan Yojana and Atma Nirbhar Bharat Abhiyan. The ministry has taken the decision to rein in outlays to deal with COVID-19 crisis-related expenses in the wake of an economic downturn.

In keeping with the latest mandate by the Department of Expenditure in the Finance Ministry, schemes that have already been sanctioned for this fiscal year have also been held off until March-end 2021.

"It may be appreciated that in the wake of Covid-19 pandemic, there is unprecedented demand on public financial resources," the directive as seen by the Economic Times stated, adding that the available funds need to be utilised judiciously pursuant to emergent and varying priorities.

Also Read: Supreme Court seeks finance ministry's response on waiver of loan interests during moratorium

The latest move came following several new proposals received by the expenditure department of the (finance) ministry for 'in-principle' permission.

The Centre's tax revenues have dropped due to the coronavirus-induced lockdown imposed to check the (COVID-19) pandemic outbreak, further straining the budget.

This is the second such cost check the government has done owing to the COVID-19 outbreak following the spending restraints announced in the first quarter of FY21 on April 8.

The Centre had limited the outlays by most ministries and departments to 15-20 per cent in the first quarter of this fiscal, after freezing the dearness allowance hike for government employees.