39. The high rate of growth of non-developmental
expenditure by Government is a growing and critical source of concern. I propose the
The most effective and lasting solution to this problem is to begin
the process of downsizing Government. We are making an immediate beginning by abolishing
four Secretary-level posts through a process of merger and rationalisation of Central
Government departments. This will take effect on April 1, 1999.
To carry this process forward in a systematic way towards reducing
the role and the administrative structure of the Government, we will constitute an
Expenditure Reforms Commission headed by an eminent and experienced person.
In preparation for the next Budget, I propose to initiate a system of
Zero Base Budgeting.
To promote transparency and curb the growth of contingent government
liabilities, Government has decided to establish a Guarantee Redemption Fund with an
initial corpus of Rs.50 crore. I encourage all State Governments to set up similar Funds.