The finance ministry has asked all ministries to not spend for the fourth quarter more than 33 per cent of the total allocation for the year.
It has also instructed them to ensure that further sanctions are made only after funds drawn earlier have been fully utilised.
Finance ministry officials told Business Standard that nearly Rs 30,000 crore (Rs 300 billion) remained unspent at the end of December 2004, which is 35 per cent of the Budget.
According to guidelines, unspent funds shall not exceed more than 15 per cent of the budget. The finance ministry has also said that ministries will not be allowed to park funds in anticipation of Cabinet approval for pending cases.
The finance ministry, in a recent review of the expenditure of various ministries, noted that some ministries had substantial and highly disproportionate levels of expenditure in December 2004, compared with the previous months.
For example, of a total Budget of Rs 500 crore (Rs 5 billion) for the current fiscal, the tourism ministry spent Rs 233 crore in December compared with Rs 125 crore (Rs 1.25 billion) at the end of November.
The Centre's expenditure till November was 45 per cent of the Budget estimate, but by the end of December, it had increased to 60 per cent.
The finance ministry also noted that 25 per cent of the ministries and departments had already spent 67 per cent of the Budget estimate by December end. The finance ministry has asked ministries and profit-making banks to cough up interim dividends.
Until December end, there was a shortfall of Rs 5,000 crore (Rs 50 billion) in normal dividends with public sector undertakings in sectors such as power yet to declare their interim dividends.
Subsequently, the ministry has asked PSUs to pay 10 per cent of the anticipated dividend for the next fiscal during the current year.