Finance Ministry gives advice against festival gifts, emphasizes tax caution

The Ministry of Finance has given strict advice to all financial institutions, including the reserve Bank of India and Central Public Sector Enterprises, which means that they stop wasteful expenditure for festival gifts and non-essential items prior to Diwali. | Photocredit: Shiv Kumar Pushpakar

In anticipation of Diwali, the Ministry of Finance has advised all financial institutions, including the Bank of India reserve, to stop wasting expenses such as festival gifts to promote fiscal discipline and to curb non-essential expenses.

With reference to an advice from the Department of Public Enterprises, the Department of Financial Services (DFS) has asked entities under its administrative control to follow the Directive, Sources said.

Push to stimulate the consumption of the middle class

The advice comes at a time when the government tries to stimulate consumption and encourage people to spend. In its attempt to support the expenditure through the middle class, the government offered relief earlier this year on the income tax front in Budget 2025-26.

Moreover, the GYst has considerably reduced the GST to around 375 items due to the reforms of the next generation GST 2.0. The reduced rates have stopped from September 22.

GST 2.0 reforms contribute to GDP -Push

The government estimates that the impact of both tax reduction and GST 2.0 would lead to RS 2.2 Lakh Crore addition to the GDP of India, which touches USD 4 trillion. These initiatives would also help to reduce the impact of a steep rate of 50 percent that was imposed by the US government on shipments from India last month.

The government also celebrates GST Bachat Utsav throughout the country. It is noted that the institutions run by the government are one of the greatest consumers and have a major influence on stimulating demand, especially during the festival.

There are no expenditure on gifts and related items for Diwali and other festivals by ministries and departments and other bodies of the Indian government, according to the DFS, stating an advice issued by the Department of Public Enterprises.

The Missive emphasized the need to promote fiscal caution and responsible use of public resources.

CPSEs told to avoid Festival Freebies

“It has been noted that there is a prevailing practice to make spending on gifts on the occasion of Diwali and other festivals in certain – Central Public Sector Enterprises (CPSEs),” had said a advice from DPE dated September 19.

“In the interest of the economy and the judiciary use of public resources, it is necessary that such expenditures are stopped. All CPSEs are asked for no expenses on gifts, etc. For each festival,” said it.

Published on 27 September 2025