The Union Cabinet on Wednesday approved a proposal for advancing the date for presenting the Union Budget by a month starting FY 2017-18. It also approved another proposal to merge the Railway Budget with the Union Budget. A decision was also taken to remove the plan and non-plan classifications for expenditure in the budget.
The change is claimed to signal a break from the colonial past.
These changes may advance budget preparation to early October. This may help to convene the Budget Session of Parliament before 25 January 2017, a month ahead of the current practice. The pre-Budget Economic Survey will also be advanced.
The advance estimates for GDP will be made on 7 January instead of 7 February and mid-year review of expenditure by various ministries is proposed to be completed by November 15.
Once the rail and general Budgets are merged and the date of presentation is advanced, there will be no requirement of separate Appropriation Bills as well as Vote on Account, as is the current practice.
With the advancement of the Budget and completion of the legislative processes before 31 March, the budget cycle will itself will be advanced. This will enable ministries and departments to ensure better planning and execution of schemes from the beginning of the financial year. Until now Budget was presented on the last day of February and it is not until mid-May that the Parliament approves it in two parts. And with the monsoon arriving in June, most of the schemes and spendings by states do not take off until October, leaving just half a year for their implementation. The change in budget presentation date has been decided so that all proposals can be implemented and expenditure started from 1 April itself. This is expected to ensure better implementation.