The Union Budget 2017-18 will be presented on February 1. Here are five reasons that make this Budget different from the earlier ones..
The Union Budget 2017-18 will be presented on February 1. Having decided to advance the budget presentation by a month, the government took the line that it should not be presented in the middle of Assembly poll in Uttar Pradesh, Punjab, Uttarakhand, Goa and Manipur. So, it consulted the Election Commission, which has concurred with the finance ministry’s view that it is an annual financial statement and can come anytime of the government’s choice, officials said. Here are five reasons that make this Budget different from the earlier ones:
1) Advancement of Budget: The Cabinet on September 21 had in-principle decided to end the colonial-era tradition of presenting the Union budget on last day of February and advance it by about a month to help complete the legislative approval for annual spending plans and tax proposals before beginning of the new financial year on April 1. “The reason we wanted to advance the date was that we want the entire budgetary exercise to be over and the Finance Bill to be passed and implemented from April 1 onwards rather than June because then the monsoon sets in and effectively, the expenditures start in October,” Jaitley said.
2) Merger of Rail Budget with Union Budget: The Cabinet chaired by Prime Minister Narendra Modi took the historic decision of scrapping a separate Railway Budget and merging it with the General Budget. According to the government, the unified budget will bring Railways to centre stage and present a holistic picture of financial position of the government. With the merger of the rail and general Budgets, and the move to advance the date of presenting the Budget to February 1, there will be no need of separate Appropriation Bills as well as Vote on Account, as is the current practice.
3) Demonetisation: Prime Minister Narendra Modi’s surprise decision to scrap high-value banknotes has upset preparations for Budget because of the resulting disruption to growth, revenues and asset sales, two government sources said. Officials fear the move will slow economic activity for much longer than originally expected, as millions of people continue to queue at banks and ATMs for cash and companies struggle to pay wages and suppliers. “We had thought the demonetisation will be a game changer,” said one official, who has direct knowledge of budget preparations, adding the central bank should have taken more steps to ease the pain of ordinary people. Another finance ministry official said economic growth for the current fiscal year to March 2017 could fall below the central bank’s revised estimate of 7.1 percent, putting pressure on fiscal deficit targets.
4) GST: The possibility of the lack of clear revenue projections on account of the shift to the GST regime in the next financial year — 2017-18 — is causing some concern among the top government officials as they work to move up the Budget presentation date. Finance ministry officials have expressed some degree of nervousness about the GST projections, pinning their hopes on the GST Council reaching a consensus on the tax rate structure before the Budget making process to enable them to make projections for next year.
5) Pitch for making India a cashless economy: One of the key arguments, that one can come across behind PM Narendra Modi’s demonetisation drive, is that he wants India to become a cashless economy. Following this, in Budget 2017, the government may announce a string of measures to take India on a path of cashless economy. According to a HT report, Incentives are on the cards for merchants promoting use of plastic money and income-tax benefits could be offered to those making payments electronically, sources said. “We will put in place several measures to push the use of debit and credit cards and also encourage digital payment…” a finance ministry official told HT on condition of anonymity.