<p>The panel headed by Chairman of the Prime Minister's Economic Advisory Council (PMEAC) C Rangarajan said that all public expenditure should be split into 'capital' and 'revenue' expenditure.<br /><br />While the Planning Commission should be responsible for formulation of the Five-Year Plan, the task of firming up annual budgets should be entrusted to the Finance Ministry based on inputs from the Plan panel, it said.<br /><br />The report said that Commission should dispense with the exercise of approving annual Plans of states. The Commission, it added, could hold a strategy or review meeting with representatives of the states.<br /><br />These recommendations were made by the committee which was constituted by the government in April last year to suggest steps to improve management of the public expenditure.<br /><br />"Plan and Non-Plan distinction in the budget is neither able to provide a satisfactory classification of developmental and non-developmental dimensions of government expenditure nor an appropriate budgetary framework. It has therefore become dysfunctional<br /><br />"The committee, therefore, recommends that Plan and Non-Plan distinction in the budget should be removed", it said.</p>
<p>The panel headed by Chairman of the Prime Minister's Economic Advisory Council (PMEAC) C Rangarajan said that all public expenditure should be split into 'capital' and 'revenue' expenditure.<br /><br />While the Planning Commission should be responsible for formulation of the Five-Year Plan, the task of firming up annual budgets should be entrusted to the Finance Ministry based on inputs from the Plan panel, it said.<br /><br />The report said that Commission should dispense with the exercise of approving annual Plans of states. The Commission, it added, could hold a strategy or review meeting with representatives of the states.<br /><br />These recommendations were made by the committee which was constituted by the government in April last year to suggest steps to improve management of the public expenditure.<br /><br />"Plan and Non-Plan distinction in the budget is neither able to provide a satisfactory classification of developmental and non-developmental dimensions of government expenditure nor an appropriate budgetary framework. It has therefore become dysfunctional<br /><br />"The committee, therefore, recommends that Plan and Non-Plan distinction in the budget should be removed", it said.</p>