Indian Finance Ministry looking at advancing date of Budget presentation

As part of a string of changes in its Budget- making exercise, the finance ministry is looking at advancing the date of presentation of the Union Budget next year to enable its passage in Parliament by March 31.(IndianExpress)

This will also allow the government to do away with the need of conducting a Vote on Account, which is otherwise needed for ministries to incur their expenditure till the Budget gets passed by both Houses of Parliament, two government officials said.

“We are considering having an earlier date for presenting the Budget next year so that it can be cleared by Parliament by March 31. This way, the ministries will not have to wait for the final passage to plan their expenditure and they can then avail the allocations from April 1 itself,” one of the officials said. The Constitution has not mandated for Budget presentation to be held on a specific date, the official said adding that the Union Budget is likely to be presented in mid-February next year.

Traditionally, the Union Budget is presented on the last working day of February every year, except in years having elections. In an election year, Budget is presented twice, first to secure Vote on Account for a few months and later in full. The final passage of the Budget after discussion by Parliament takes time and gets usually passed around mid-May, restricting expenditure of ministries in the initial two months of the financial year.

“The idea is to make the process smooth and expeditious. If the Budget gets passed by March 31, then the ministries can streamline their expenditure in a better manner especially in the first quarter of the financial year,” another official said.

After the presentation of the Budget in February, the discussion on the Budget begins a few days after it. Since Parliament is not able to vote the entire Budget before the commencement of the new financial year, there is a necessity to keep enough funds at the disposal of the government in order to allow it to run the administration of the country. Therefore, the government obtains Parliament’s approval for Vote on Account for a sum sufficient to incur expenditure on various items for a part of the year.

Normally, the Vote on Account is taken for two months only. But during election year or when it is anticipated that the main Demands and Appropriation Bill will take longer time than two months, the Vote may be for a period exceeding two months. The Centre is working on other changes also in the Union Budget for 2017-18, including a merger of Railway Budget with the General Budget and a removal of distinction of plan and non-plan expenditure.