The government will likely seek Parliament’s nod to appropriate funds for the first five months of the next fiscal in the interim Budget to be presented on February 1. This is expected to ensure that the funding of key programmes remains unhindered during general elections and till the regular Budget is approved by August.
Wednesday (January 9) was the last day for all departments and ministries to submit their spending plans for 2024-25 to the Ministry of Finance.
The Finance Ministry had indicated to all departments and ministries to provide their budget estimate for 2024-25 including a well-thought-out expenditure estimate for the first five months to avoid any funds shortage till a new government takes charge after general elections in April-May.
The interim Budget on February 1 will also present the revised estimate (RE) of government expenditure for 2023-24.
In election years, the budget session of the Parliament is usually very short (it was about ten days in 2019). Hence there is little headroom to get additional funds other than approved through the vote on account for running expenses for a few months till the next government takes Parliament’s nod to spend more.
The Finance Ministry had told the ministries to be realistic in their budgeting both for this year and next year as the government is following just-in-time releases to keep the cost of borrowing lower.
Given the upcoming election, the finance ministry has relaxed cash management guidelines to allow departments and ministries to release Rs 500 crore or more in schemes without any restrictions to accelerate public spending in the last quarter of the current fiscal
According to extant cash management guidelines, ministries must attune bulk expenditure items to monthly GST collections and quarterly advance tax payments for smooth exchequer control.