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Election effect: Budget may be postponed to March
December, 26th 2011

Government may postpone the 2012-13 budget to March to ensure that it does not clash with the Model Code of Conduct during upcoming assembly elections.

Sources in the government said the issue of postponing the Union Budget, which is preceded by Railway Budget and the presentation of the Economic Survey, has been discussed informally. "We are keeping the option of postponing the budget by four-five days open," said a senior government functionary.

However, the government does not think that the Code of Conduct-- which forbids government from making announcements which can influence voters conferring an unfair advantage on parties in power -- constitute an impediment to presentations of budgets when they are due. These are state elections whereas the two budgets will be presented to Parliament -- a view that Election Commission subscribes to as well. "Parliament is supreme in our Constitution. EC has no powers over Parliament's functioning. Budgets are announced in Parliament and, therefore, do not come under the Model Code of Conduct", said a senior EC official.

Sources, however, said the government was keeping the option of putting off the two budgets untill the Goa polls. The Union Cabinet is to shortly take a call on this.

There has been at least one instance, where the budget was presented around March 15.

Whenever general elections are due the February date is missed and the government manages with a vote-on-account and a full Budget is presented only after a new Lok Sabha is constituted.

The view is that a change is date is not going to run afoul of constitutionally-established norms. In any case, every year, the government presents a vote-on-account to help it spend during the first quarter of the financial year until Parliament's Standing Committees have examined the proposals.

Traditionally, the finance minister presents the Union budget on the last day of February. The Budget, which includes the Finance Bill for tax-related amendments, and the Appropriations Bill, for spending, which require parliament's nod. While the two Bills are approved usually in early May after Parliament has discussed it and standing committees have done detailed deliberations, indirect tax proposals take effect from March 1.

The Election Commission on Saturday said assembly elections in Goa, Manipur, Punjab, Uttar Pradesh and Uttarakhand will be held between January 28 and March 3. Although elections in politically-crucial

Uttar Pradesh will be over on February 28, a day before Union Budget is due to be presented, polling in Goa is scheduled for March 3.

Former expenditure secretary D Swarup, who was the government's chief budget officer for over a decade, said that the election schedule would restrict the government's ability to make announcements related to Goa where elections are scheduled after the usual budget date.

"Since these are assembly elections, the government can go ahead with the budget but it will be constrained in announcing measures related to states where the election process is underway," Swarup said.

This will also apply to the Railway Budget, where several state-specific projects and trains are announced. Therefore, the government will find it difficult to announce any plans for Uttar Pradesh if Railway minister Dinesh Trivedi delivers his budget speech on or before February 28.

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