The finance ministry is planning to crack the whip on ministries and government departments that do not spend their annual budgetary allocation evenly through the financial year.

The ministries and departments that do not spend at least two-thirds of their Budget outlay by December-end, have been told they would have to forego funds to the extent they spend less. The exercise, however, would exclude certain “holy cows” like the ministry of defence, officials said.

Tightening it up further now, the finance ministry has introduced another filter that requires all ministries and departments to spend at least 85 per cent of their Budget outlay till February-end. If they do not, then they would forego moneys to the extent they spend less.

Finance ministry officials said the move served two purposes: one, it would avoid bunching of expenditure during the last three months of the fiscal and consequently improve the quality of spend. And two, it would also help the government save a tidy sum, at the revised estimate (RE) stage.

Most government departments and ministries, as a rule, bunch their expenditure in the last quarter of the fiscal. In 2005-06, for instance, the expenditure till December was just Rs 332,499 crore or 64.6 per cent of the Budget estimate. In the last quarter, it shot up to Rs 5,03,908 crore.

In 2004-05, the record was marginally better. The government had spent Rs 326,791 crore or 68.4 per cent of the Budget target. But within a span of three months, by March, it managed to spend as much as Rs 497,682 crore.

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