"In the context of the current fiscal situation, there is a need to continue to rationalise expenditure and optimise available resources," the ministry said in an office memorandum.
The austerity measures include a bar on government officials from first class air travel on overseas visits, a bar on holding meetings in five-star hotels and instructions to departments to avoid holding seminars abroad.
"There will be a ban on holding of meetings and conferences at five star hotels except in case of bilateral/multilateral official engagements to be held at the level of minister-in-charge or administrative secretary, with foreign governments or international bodies of which India is a member," the ministry said.
"While officers are entitled to various classes of air travel depending on seniority, utmost economy would need to be observed while exercising the choice keeping the limitations of budget in mind. However, there would be no bookings in first class," it added.
It recommended, instead, more use of the facility of video conferencing, saying it "may be used effectively".
With the aim to restrict fiscal deficit to 4.1 percent of GDP in the current fiscal, the ministry has also put a freeze on fresh appointments and filling up of posts lying vacant for over a year.
The ministry said purchase of new vehicles to meet operational requirement of defence forces, paramilitary forces and security organisations are permitted but ban on purchase of any other vehicles would continue.