Economy
Government announces austerity measures to cut expenditure
The Finance Ministry issued a statement pushing for a 10% cut in non-plan expenditure in order to maintain fiscal discipline in line with budgeted aims
 
The Government, on Thursday, announced directions to its own bureaucrats and departments, to cut spending and unnecessary expenses in a bid to push austerity. The Finance Ministry said that it was aiming to cut non-plan expenditure by 10%. 
 
The statement of the Finance Ministry said that the 10% cut would be mandatory for all ministries and departments. 
 
The Finance Ministry said that it "strongly discourages" holding seminars abroad, other than for exhibitions for trade promotion. The Ministry also banned holding meetings in five-star hotels, unless these meetings were held at the level of the Minister-in-charge or Administrative Secretary, and the meeting was with foreign governments or international bodies of which India was a member.
 
The Ministry explicitly said that keeping in mind the budgetary cuts mandated in the statement, there would nonetheless "be no bookings in First Class." The Finance Ministry further banned the creation of any new Plan and Non-Plan posts. 
 

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Government considering additional capital infusion in public sector banks

PSBs will require an infusion of Rs2.4 lakh crore in equity by 2018 to comply with international standards laid out by the Basel III regulatory regime

 

The government is considering additional capital infusion in public sector banks (PSBs), according to a Union government official. The capital infusion will help the lenders boost credit amid rising bad loans. Bad debts accounted for 4% of total lending as of 31 March 2014, according to Reserve Bank of India data.

 

The government may almost double the amount of capital it will inject into PSBs this fiscal year to Rs21,700 crore, according to the government official.

 

PSBs will require an infusion of Rs2.4 lakh crore in equity by 2018 to comply with international standards laid out by the Basel III regulatory regime. This is the forecast as per the Budget Speech made by the Finance Minister earlier this year.

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