Weekly Current Affairs

Govt mulls presenting Budget by Jan-end [Polity]

  • 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.
  • Govt. feels that 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 twostage 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.
  • 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.
  • 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 General Budget, referred to as the Annual Financial Statement in Article 112 of the Constitution of India, is presented by the finance minister in Parliament every year on the last working day of February.