Two days after the government announced an early budget next year, the finance ministry on Friday kick-started the budget exercise by issuing the customary budget circular to all government departments to submit revised estimates for FY17 and estimates for FY18.
The budget discussions are scheduled to be held October 17 and the proposals will be finalized by mid- January, keeping in mind that FY18 budget will be presented around February 1. With the end of the five year plans and with it the distinction of Plan and non-Plan categorization of expenditure, the budget documentation process has been rationalized to reflect the change under broad categories of capital and revenue expenditure.
“The Ministry of Finance will be guided by the Vision document being prepared by the NITI Aayog, as this will help in setting out the resource priorities of the government. The budgeting exercise will shift towards a medium term expenditure framework (MTEF) to give greater predictability to Ministries about resource availability,” the circular read. The MTEF statement was tabled in the Parliament in the Monsoon session. Using the allocations indicated in the MTEF statement, each Ministry would, decide the scheme-wise allocations in the statement of budget estimate format and forward them to the budget division.
On Wednesday, the government announced that it will not present a railway budget starting FY18, dispensing with an annual practice that started 92 years ago in the British era. The transporter’s finances will now be amalgamated with the Union Budget. Besides ending Plan and non-Plan distinction, it gave an in-principle nod for advancing the Budget presentation with a view to completing the parliamentary and administrative processes by March 31 each year and implementing the Budget from the start of the fiscal concerned, rather than practically from mid-May now.