How presenting the Budget early seems to be paying off already
May, 24th 2017
Breaking with a long-standing tradition, Finance Minister Arun Jaitley presented the Union Budget a full four weeks early this year and the results already seem to be showing in terms of expenditure. According to a report in Business Standard, the total spending in April 2017 was Rs 2.43 lakh crore, nearly 50 percent higher than in the same period last year. It constitutes 11.3 percent of the budgeted spending estimates for FY18.
A senior government official was quoted as saying that the early passage of the Budget ensured there was no lull in spending and the momentum from the previous fiscal year continued. He added that the focus has been on schemes related to school education, women and child development, housing, and agriculture.
He said there was no emphasis on expenditure earlier as the revenue collection in the first quarter was low, adding thatÂ most notably, there had been a change in attitude throughout the government.
The early presentation of the Budget resulted in the early passage of the Finance Bill.Â In past years, the Finance Bill was typically passed in May, more than a full month after the start of the financial year. This year, it was passed on March 31, a day before FY18 got underway.
CHANGES IN THE BUDGET
While announcing the advancement of the Budget, Prime Minister Narendra Modi had the move was done so that that expenditure getsÂ authorised by the time the new financial year begins.
In the past, the government used to obtain a Vote-on-Account from Parliament that would allow a limitedÂ release of funds until the Finance Bill was passed.
This year, there were also other changes such as merging the Rail Budget with the Union Budget for the first time in 92 years, a move which Jaitley said would bring the Railways to the centre stage of the government's fiscal policy.
MORE CHANGES AFOOT?
The Budget could be advanced even further, if the government moves to a January-December fiscal year. The Prime Minister last month backed the idea of moving from the existing April-March fiscal year so that farmers get early allocations.
While he urged states to move to this fiscal format - which Madhya Pradesh has already done - a national switch may not take place anytime soon. But a top government official was quoted as saying that the 2018-19 Budget could be announced in early January as part of a plans for a gradual transition.