For a year no new government scheme will be announced: Nirmala Sitharaman

New Delhi : No new government schemes will be announced for at least one year from now, the Finance Ministry said. It comes after the government has come into a financial pressure of keeping the economy running in low budget.

Finance Ministry has asked all other ministries to stop sending fund request for new schemes.

Spending will only be allowed in the Prime Minister's Garib Kalyan Package and the announcements made under the Atmanirbhar Bharat package recently. No other scheme would be approved this financial year, said the ministry.

"It may be appreciated that in the wake of the COVID-19 pandemic, there is an unprecedented demand on public financial resources and a need to use resources prudently in accordance with emerging and changing priorities," a finance ministry note said.

The statement also mentioned that the schemes already approved under the budget will also stay suspended till March 31.

The note also said any exception to these new rules would need to be approved by the Department of Expenditure.

The government's move comes after a series of grim economic indicators, including the slowest GDP growth in 11 years and predictions of an economic contraction in more than four decades. India's credit rating also moved one step closer to junk after Moody's Investors Service downgraded the nation to the lowest investment grade level.