The Union Finance Ministry has relaxed its cash management guidelines as per the Office Memorandum (OM) of 2017 to encourage ministries and departments to carry out capital expenditure amounting to Rs 44,000 crore that was forecasted in the Budget 2021.
Accordingly, the caps and restrictions on the monthly/quarterly expenditure plans (MEP/QEP) for expenses under the capital heads of the budget will not be applied as directed by the latest OM issued by the finance ministry.
“Monthly Expenditure Plan (MEP) or Quarterly Expenditure Plan (QEP) ceilings and restrictions on bulk expenditure items referred in the OM dated 21 August, 2017, shall not be applicable for expenditure under the capital heads under the Budget. These relaxations shall take immediate effect and shall apply until further orders,” the ministry was quoted by The Economic Times.
Apparently, items for bulk expenditure exceeding Rs 2000 crore mark were slated for the last month of every quarter in order to appropriately put into use the inflows of direct tax receipts in June, September, December and March respectively.
Likewise, releases between Rs 200 crore to Rs 2000 crore were timed to take place from the 21st to 25th of each month so as to take the benefits of the same GST inflows.
All of these restrictions have been removed as per the given OM with an aim to boost the economy that is currently troubled with the second wave of Covid-19 cases across the country.
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