They said that these two unforeseen developments coming as they did when the Government was trying to curb expenditure could not be taken into account while presenting the 1999-2000 budget.

Faced with these two developments, the finance ministry has decided to intensify the expenditure control measures. It has been decided that new recruitments would be made only after independent evaluation by bodies such as the National Council of Applied Economic Research, Institute of Economic Growth, etc. These recruitments would be restricted to technical people only.

Pointing out that the government had crossed the "hump" following the implementation of the Pay Commission report, officials said the drive to curb expenditure will gain momentum now. For instance, user charges were proposed to be raised with acorresponding improvement in services like electricity and irrigation.

They said a beginning had been made by hiking the user charges payable by senior government officials for health care, cars, etc. This particular move is largely symbolic as the savings amount would not be significant. "But at least a beginning has been made," they said.

The 1999-2000 budget envisages an increase of Rs 8,629 crore in the Govenment's plan expenditure over the revised estimates in 1998-99. The non-plan expenditure is estimated to be Rs 2,07,003 crore compared to Rs 2,13,541 crore in 1998-99, which would have actually been Rs 2,32,003 crore but for a change in the system of accounting of loans to states and union territories against net small savings collections.

The Government, officials said, has already set up a Guarantee Redemption Fund with a corpus of Rs 50 crore as proposed in the budget, and added that the corpus would be raised gradually. The purpose of the fund was to promote transparency and curb growth ofthe Government's contingent liabilities.

Officials further said that the move to set ip an Expenditure Reforms Commission proposed in the budget had been stuck follwing the announcement of elections. The issue would be decided by the new government as it would require a consensus among the political parties. The commission as envisaged was to be headed by a senior leader among these parties.

Officials felt that savings could come about by restricting the Government's expenditure on essential areas. The objective could also be achieved by transferring some of the schemes to the state governments.

The Centre was persuading the state governments to initiate reforms in all sectors in order to generate savings, they said.