Union Cabinet is likely to discuss on Wednesday the issue of advancing Union Budget as Centre plans a number of measures like merging the railway budget with general budget, considering a change in the financial year by advancing Budget presentation in December and having just one head of expenditure by merging both plan and non-plan expenditures.
“The Cabinet will tomorrow (Wednesday) take a call on issues like merger of Union budget with railway budget, advancement of budget date and merger of plan and non-plan expenditure in one head,” a source said.
Considering a change in the financial year, the Central government had last month decided to go to public to seek their feedback and suggestions. The Centre had asked people to give their views by September 30 on MyGov.
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The Centre also appointed a Committee chaired by former Chief Economic Advisor Shankar Acharya to examine the desirability and feasibility of having a “new financial year”. Other members of the panel are former Cabinet secretary K M Chandrasekhar; former principal finance secretary (Tamil Nadu) P V Rajaraman; and Senior Fellow at Centre for Policy Research, Rajiv Kumar. The committee has to submit its report by December 31, 2016 after examining the merits and demerits of various dates for the commencement of the financial year, including the current date of April 1, taking into account past studies on the desirability of a change in the financial year.
While the country’s financial year currently runs from April 1 to March 31, it’s been argued that shifting it to a calendar year—January 1 to December 31 — is a “better option”. This issue was last examined by the LK Jha Committee in 1985, but its recommendation to move to a financial year of January 1- December 31 (for Central and state governments), did not find many takers then. A Niti Aayog panel headed by member Bibek Debroy had recently indicated its inclination towards a merger of the financial year with the calendar year.