business national
will be passed by May 15. As a result government is forced to
go in for what is called vote-on-account along with presentation
of the budget for government expenditure for two months of
April and May in the new financial year. As per the constitution,
the government cannot spend any money from the consolidated
fund of India without getting Parliamentary approval. Since the
passage of finance bill is completed only by May first week,
government will have to seek temporary approval by way of vote
on account for spending in April and May until the passage of
the full budget. This also meant delay in implementation of the
planned spending proposed in the budget.
So by completing this budgetary exercise before March 31,
government will now be able to implement its budgetary plans
from day one of the new financial year that starts on April one.
This will ensure that government does not lose two months
of precious time in implementing its planned projects in the
New Year. The first stage of budget passage in Parliament is the
approval to vote on account. The second stage is passage of
demands for grants by various ministries and departments and
third and final stage is the passage of finance bill, which provides
for various new tax measures in the budget. Now the first stage
clearance of vote on account would no longer be required as
the whole budget itself will be passed before the new financial
year.
At the turn of the century, the then NDA government led by
Atal Bihari Vajpayee did away with budget presentation at 5 PM
on the last day of February. The then finance minister Yashwant
Sinha advanced budget presentation to 11 AM ending yet another
colonial practice to suit the British masters. Presenting budget at
5 PM meant it was around noon in London, a convenient time for
the British, but not for Indians in India.
By subsuming the Rail Budget in the general budget, the
railways would be in a better position to raise funds, from
elsewhere including foreign on the strength of the sovereign to
invest in projects having long gestation period. The government
will have to ensure is that the operational autonomy of Railways
is not compromised as feared in some quarters.
Also this move should not become a precursor to privatization
of Railways, which may be disastrous in a country like India
where the Railways are the life line, particularly for the poor.
Along with this merger of rail budget, the government decision
to advance the general budget presentation and doing away with
the distinction of plan and non-plan expenditure should lead to
better planning and spending outcomes in the entire financial
year by various ministries and departments. One also hopes these
reforms lead to further reforms of general budget presentation
in the coming years. It is high time that the country had stable
tax rates, which are not tinkered with and tax exemptions done
with barring a few exemptions so as to do away with rigmarole
budget presentation.
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November 16-30, 2016 The Dayafter
53