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Will the many departures be accompanied by innovative disruptions?

Will the many departures be accompanied by innovative disruptions?

The budget for 2017-18 will have several unique features. I list a few of these:

The budget will be presented for the first time on 1 February 2017, month ahead of the practice so far of presenting the budget on the last working day of February. In the earlier practice, the parliament will go for a two week recess after 15 March , reconvene in early April and vote on the demand of different ministries through April. After discussions and amendments, if any, the Budget would be passed in May. The sanction for expenditure during the first quarter of the new financial year would be provided by passing an vote on account.


In this system the first  quarter of the financial year would witness ad hoc modest investments. The second quarter, the monsoon season for most parts of the country, would impact revenue and expenditure; thus these are kept at modest levels. The momentum will pick up in the third quarter and peak in the fourth and final quarter. Several departments will struggle to spend the budgeted allocation even leading to lapses, in manipulations or carry forward. The whole exercise thus suffers from uneven  revenue and  expenditure through the four quarters.


In the new changed system, the budget for the year  would be passed in the current year itself and thus the actual receipts and expenditure could begin from Day One  of the new financial year and thus would be rational.


There will be no separate budget for the railways. Again this is a departure from the practice of presenting a separate railway budget over the last nine decades. This will give the flexibility for the finance minister to address the requirements of the railways and also come out with proposals for raising resources for railway development in a holistic manner. The finance minister can look at the total needs of the surface transport sector in an integrated manner. For the railways there will be a saving of around Rs 9500 crore as payment of dividend to the central exchequer.

With elections for five state assemblies announced for March-April there will be the problem of announcing special schemes. Political parties in opposition can cry foul over any proposal of concession or relief on grounds of impacting voting pattern.

The Prime Minister in his address on 31 December 2016 had announced several new schemes relating to agriculture and other sectors. These are normally the domain of the finance minister. These have, to some extent, pre-empted the budget proposals and also beat the announcement of the election schedule. A cleaver ploy indeed.

Instead of computing the revised estimates of the budget of 2016-17 at the end of eleven months, this will have to be done on the basis of the figures  available in the last week of January. With the traditional bunching of expenditure and revenues in the closing weeks of the year, this change would deny the government  getting a more precise revised estimate.

States have not crystalised their plan to advance their budgets. The computations of their performance and aligning these to the Union Budget would pose some challenges.

A silver lining is the announcement by the finance minister on introducing the GST from 1 July. The Centre has conceded most of the demands of the states for ensuring this. This single measure is expected to bring about substantial improvements in tax reforms and revenue administration.

The budget will also provide clarity on the impact of demonetisation.


Overall one can expect a greater degree of interest and excitement over this year’s  budget.


Prannoy Roy of NDTV, other 24x7 national media, CII and others must be getting ready  for presenting a more interesting budget circus.  - SV

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