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Cabinet Note on Budget Recast Soon

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FinMin proposal involves merging rail & general budgets and advancing its presentation in Parliament to January from February end
The finance ministry will shortly move a cabinet note on a multidimensional recast of the budget that's set to mark a break with the past.The proposal involves merging the rail budget with the general budget and advancings its presentation in Parliament to January from February end.
If cabinet endorses the plan, a January budget will also see no distinction between plan and non-plan expenditure. And, if finance minister Arun Jaitley does succeed in getting the goods and services tax (GST) rolled out on April 1, revenues will take on a vastly different look, with the budget process being tweaked accordingly.
An internal government panel has backed the idea of doing away with a separate railway budget, a 92-year-old practice that dates back to the colonial era. The panel will suggest how this can be achieved.
“The proposal will be moved short ly,“ a senior government official told ET, underscoring its urgency. Traditionally, budget preparations begin in September with the issue of the budget circular. Officials in the budget division of North Block are keen on a decision at the earliest so that they can start preparations in keeping with the proposed changes and new date.
Merging the budgets will end a tradition that some say has lost relevance, besides helping the railways avoid politically negative scrutiny that's detrimental to efforts aimed at reviving the state-owned transporter. Advancing the announcement will allow the budget process to get completed well before the financial year begins, thus allowing ministries to get quickly off the mark with their plans rather than having to wait for parliamentary approval.
The next budget will in any case be different as the government has already decided to drop the plan and nonplan classification of expenditure, in line with recommendations by the Expenditure Management Commission and the C Rangarajan-led committee. The department of expenditure has already issued comprehensive guide lines for appraisal and approval of public-funded schemes and projects as the first step in line with these changes. The budget will now only have reve nue and capital differentiation.
If the budgets are unified, the finan ce minister will present a statement on railways. He will continue with the current government's tradition of not announcing new trains or routes. Railway finances could at best become a separate annexure.
A government panel is also considering whether India needs a new financial year as opposed to the current April-March period.
The report of the committee headed by Shankar Acharya looking into the possible change in financial year to January-December from AprilMarch is expected only by December.
The Economic Times New Delhi,12th September 2016

 

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