Govt Considers Advancing Budget to January end
Govt Considers Advancing Budget to January end – The finance ministry is overhauling the Budget-making exercise.
The Union Budget has for decades been presented on the last day of February, but this could soon change with the government mulling advancing it to January-end, to complete the exercise before the beginning of the new financial year.
The finance ministry is overhauling the Budget-making exercise, which may see scrapping of the practice of presenting a separate Budget for the railways and Budget documents getting slimmer with indirect tax proposals finding almost no mention after excise duties, service tax and cesses are subsumed under the proposed goods and service tax (GST) regime.
Also on cards is the abolition of the distinction between Plan and non-Plan expenditure, to be replaced with capital and revenue expenditure.
Sources said the government felt the Budget exercise should ideally be over by March 31, against the practice of it being done in two phases between February and May.
While the Constitution does not mandate any specific date for presentation of the Budget, it is usually presented on the last working day of February and the two-stage process of parliamentary approval takes it to mid-May.
As the financial year begins on April 1, the government in March takes Parliament approval for Vote on Account for a sum of money sufficient to meet expenditure on various items for two to three months. The Demands and Appropriation Bill, entailing full-year expenditure and tax changes, is then passed in April/May.
Sources said the finance ministry felt if the process was initiated earlier, there would be no need for a Vote on Account and a full Budget can be approved in one stage before March 31.
The revenue department is also mulling advancing its pre-Budget meetings with stakeholders to September instead of holding them in November/December.
In the Budget speech, Finance Minister Arun Jaitley had announced of doing away with Plan and Non-Plan classification from 2017-18, in line with the termination of the 12th Five-Year Plan (2012-17).
Also, with the roll out of the GST, possibly from April 1, 2017, the need for the Union government to legislate changes in excise duties, service tax and cess will cease to exit as they would all be subsumed in the new national sales tax. The GST rate is to be fixed by the GST Council comprising Union finance minister and representatives of all 29 states.
This would mean that Part-B of the Budget, which contains tax proposals, would get slimmer with only direct tax proposals being mentioned besides a few other taxes, like Customs, which would continue to be in the Centre’s domain even after GST rollout.
Besides, the 92-year-old practice of presenting a separate Rail Budget is set to come to an end from the next financial year, as the government proposes to merge it with the General Budget.
With the merger, the issue of raising passenger fares, an unpopular decision, will be the Finance Minister’s call.
The Budget, which is presented by means of the Financial Bill and the Appropriation Bill has to be passed by the House before it can come into effect on April 1.
The government has already set up a committee to examine the feasibility of having a new financial year, replacing the existing April-March period.
The committee, which will submit its report by December, will examine merits and demerits of various dates for commencement of a financial year, including the existing dates (April-March).