The finance ministry on Thursday kicked off the budget-making exercise for 2010-11 by asking other government wings to review all schemes that can be eliminated, reduced or be merged with other schemes. Ministries are also asked to assess the continued relevance of all existing schemes to improve efficiency and reduce duplication.

The finance ministry wants individual departments to take all efforts to minimise the quantum of unutilised funds surrendered by making a thorough assessment of the fund requirement initially. This helps in a more focused utilisation of available resources.

The estimates of disinvestment of equity holdings in public sector enterprises may be centrally furnished by the department of disinvestment, according to the circular.

It is necessary to review the existing expenditure budget in the first instance, to prioritise the activities and schemes, both on the plan and non-plan side and identify those activities and schemes, which can be eliminated or reduced in size or be merged with any other scheme.

All ministries and departments were expected to take up the exercise of reviewing or evaluation of all ongoing schemes to determine their continued relevance, said Finance ministry in its instructions to all other ministries on making budget estimates for the next fiscal.

The instruction to carefully review existing schemes is aimed at possible streamlining of welfare measures so that resources can be utilised optimally. Finance minister Pranab Mukherjee had said after the recent G-20 meeting that the government will not exit from the stimulus measures before the economy is fully revived.

Reserve Bank governor D Subbarao also said this week the central bank would not roll back its soft monetary policy before the economic recovery is secure.

The circular from the department of economic affairs also suggested that ministries should not include schemes, which are supposed to be discontinued from the next fiscal onwards, in the budget estimate.

The estimate of expenditure will be finalised after the expenditure secretary meets financial advisors from all ministries by October-November, 2009, the circular said.

To reduce the possibility of funds remaining locked up in various government wings unutilised, which deprives resources for other needy agencies, finance ministry said that due note may be taken of past performance while framing the estimates.

Also, the stages of formulation and implementation of various schemes, the capacity of the implementing agencies to implement the scheme as scheduled, the constraints on spending, and the quantum of government assistance lying with the recipients unutilised should be considered.