Union Budget maybe in January, not February

Union Budget maybe in January, not February

Union Budget maybe in January, not February

The government is planning to advance the Union Budget presentation by a month to January.

The move will help in completion of the budget process before the end of financial year and avoid a vote on account. Traditionally, the budget is presented on the last day of February.

However, this will not change the financial year (April-March) cycle at this stage. The government has set up a committee under the chairmanship of former chief economic advisor Shankar Acharya for looking at the possibility of change of financial year. It is expected to give its report in December after which any decision on the change of financial year will be taken.

“The exercise (advancing the Budget) is only to streamline the entire budgetary process and ensure its completion within the financial year itself,” a senior official said. He said, the idea is also to avoid a vote on account.

Usually, the annual Budget is presented by the end of February after which it is discussed, the details of the budget are scrutinised by a Parliamentary committee and it is finally passed by mid-May.

But the financial year ends on March 31 and the government needs funds for various routine expenditure between March and May. It is through a vote on account that the government gets Parliamentary approval to run the country’s routine financial business for a few months, using funds drawn from the Consolidated Fund of India.

The government is also planning to merge railway and General Budget from this year. The accommodation of railway budget into the Union Budget may be possible after the GST rollout makes the Union Budget a less bulky document.

Part B, which contains the tax proposals of the Union Budget will be very small after GST.
The government’s policy think tank Niti Aayog has recommended the merger following which the Prime Minister’s Office has sought a reply from the railways.

The government will also do away with the distinction of plan and non-plan expenditure from the upcoming financial year.

To make the classification simple, the spending will be categorised as capital and revenue expenditures.

Revenue expenditure is the government’s day-to-day expenses plus spending on interest payments and subsidies.

Capital expenditure is done on asset-making such as land, buildings, machinery, and equipment. Investments in shares, loans and advances that the Centre grants to states and Union Territories and its companies also constitute capital expenditure.

Solving tangle

 Move to help completion of budget process before end of financial year
 It will also help in avoiding   vote on account
 Panel to examine possibility of change in financial year
 Committee likely to submit      report in December
 

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