The government has decided to drastically cut down on red tape in approving expenditure proposals by central ministries.
In the new dispensation, the finance ministry will allow all departmental secretaries to approve expenditures on approved schemes and heads without any reference to financial limit.
This means that once a proposal has got the green signal in the Budget or under any other specific Cabinet proposal, the same need not travel back to the finance ministry at every stage.
North Block will instead retain control over only four areas. These include permission to write off losses, since there is a considerable possibility of misuse of such provisions without a second check and reallocation of expenditure from one head to another. This is because it is only Parliament, which has the right to approve of any such measure.
In addition, the finance ministry will also have the right to decide on any fresh appointments since those involve an additional long-term liability, and finally the power to alter the pay scale at any level.
Government officials said since a lot of issues of inter-se seniority as well as the question of parity among different departments were involved, the finance ministry would retain the right as the nodal ministry to resolve these issues.
For all other expenditures, the finance ministry has delegated the power of approval to the departments.
Instead it will now only ask the department to show whether the expenses were within the approved aggregate budgetary limit under plan or non-plan heads.
This will drastically slash the number of files that will travel back and forth between the department of expenditure and others. This will also gel with the new cash management policy introduced on a pilot basis in nine ministries in 2003-04, to ensure that ministries did not bunch their expenditure towards the end of the fiscal year.
As per the current expenditure policy, any financial proposal can be launched by the concerned department, only upto specified limits. Expenditure beyond those limits must travel to the department of expenditure under the finance ministry.
Senior officials said this had introduced another layer of officialdom, besides allowing the ministries and departments to claim that projects and schemes got delayed due to circumstances over which they had no control.
For instance even for those projects which had figured in the budget, the finance ministry exercises the right to give the go ahead at almost every stage, if the sum involved was beyond the prescribed powers of secretary.