The finance ministry has directed all secretaries to the government of India to ensure that their ministries or departments spend no more than their authorised allocation as passed by the Parliament,
“The public accounts committee (2008-09) has observed that some ministries and departments of the central government continue to display indifferent attitude towards rules laid down for containing the expenditure within the authorised limits,” Sushama Nath, expenditure secretary, finance ministry said in a note circulated on Monday.

Special attention must be given to the department of economic affairs, ministry of defence, ministry of railways, company affairs, and ministry of mines so that the phenomena of excess expenditure is not repeated, she wrote.
With the Fiscal Responsibility and Budget Management (FRBM) Act, 2003 in operation, spending within the allotted budget is all the more necessary and stringent steps must be taken by the concerned secretaries to ensure financial discipline.

Under various sections of Rule 52 of the General Financial Rules, departments of the central government shall be responsible for the control of expenditure against the sanctioned grants. “The control shall be exercised through the heads of departments and other controlling officers,” the note said.
It further says that no expenditure shall be incurred which may exceed the total grant authorized by the Parliament, except in exceptional circumstances. The grants can be exceeded after obtaining a supplementary grant or an advance from the contingency fund.

The letter dated 25 Jan, 2010 recommends that stern action must be taken to deal with cases where slackness is noticed and where prescribed financial rules are flouted. Instructions were issued to all financial advisors on October 26, 2009 where the committee asked the finance ministry to rigidly enforce the financial rules and procedures to minimise the instances of excess expenditure to the bare minimum.