MP Govt imposes austerity drive as State debt crosses Rs 5 lakh crore
The Madhya Pradesh Government has unleashed a comprehensive austerity drive across all departments, corporations, boards and Government institutions, imposing stringent curbs on expenditure as the state grapples with a cumulative debt burden exceeding Rs 5 lakh crore — a fiscal reality that has compelled the administration to undertake what officials describe as one of the most far-reaching belt-tightening exercises in recent memory.
The Finance Department has issued detailed guidelines for the financial year 2026-27, mandating immediate compliance across every tier of the state’s administrative machinery. The directives apply uniformly to all Government departments, corporations, nigams, mandals, universities, divisional commissioners, commissioners, revenue divisional officers, collectors and district-level officers.
Among the most striking provisions is an outright ban on foreign travel by officials. Domestic air travel has been restricted to economy class for all categories beyond the specifically exempt top tier.
Two officers will henceforth share a single Government vehicle — a measure designed to halve the state’s fleet-related expenditure at one stroke. Additionally, no new vehicles will be procured for the next two years unless the existing fleet is demonstrably insufficient.
Welcome ceremonies and reception events — deeply entrenched feature of bureaucratic culture in the state — have been categorically prohibited. Festival celebrations and commemorative functions organised by Government departments will also cease, eliminating a significant drain on departmental budgets. The austerity drive extends to the physical trappings of official life. Interior decoration of Government offices has been expressly forbidden, and the use of hired vehicles by officials and Government institutions will be sharply curtailed. Only those vehicles that have completed their full operational lifespan will be considered for replacement, and even then only after rigorous justification.
In a move targeting the sprawling network of state-owned corporations and public sector undertakings, the Government has directed that maximum dividends be compulsorily deposited into the state exchequer’s account — ensuring that profits generated by public enterprises flow back to the consolidated fund rather than being retained or deployed at the discretion of individual entities.
The culture of lavish corporate-style events has also been targeted. Calendar and diary printing — a perennial expenditure item across departments — has been discontinued. Official events and conferences will no longer be held in private hotels and banquet halls but will be mandatorily organised at Government premises, institutional campuses and official venues, eliminating costly venue hire and hospitality bills.
The Government has further directed that all autonomous bodies, corporations and allied institutions functioning under state control conduct an immediate review of their recurring expenditure and identify areas for reduction. Senior officials at the division and district levels have been instructed to ensure strict compliance and to submit periodic reports on implementation.
