Updated: September 21, 2016 3:19:53 pm
The Union Cabinet on Wednesday approved the merger of the general budget with the railway budget. The high-level meeting in which the decision was taken was attended by Finance Minister Arun Jaitley, Home Minister Rajnath Singh and Minister of State (PMO) Jitendra Singh. While the railway minister will no longer present the budget, the process for preparing the budget will remain the same. Both budgets will be presented by the finance minister in Parliament.
Jaitley, at a news conference, confirmed the move and said the two budgets have been amalgamated. At the same time, the functional autonomy of the rail budget will continue to be maintained, the finance minister added.
The Cabinet also gave its nod to advancing presentation of the annual Budget by a month and removed classifications for expenditure to make the exercise simpler.
To facilitate this, the Budget Session of parliament will be called sometime before January 25, a month ahead of the current practice. Accordingly, the beginning of budget preparation will be advanced to early October and GDP estimates made available on January 7 instead of February 7 now.
Till now Budget was presented on the last day of February and it is not until mid-May that the Parliament approves it in two parts. And with the monsoon arriving in June, most of the schemes and spendings by states do not take off until October, leaving just half a year for their implementation.
Early presentation of Budget would mean that the entire exercise is over by March 31, and expenditure as well as tax proposals come into effect right from the beginning of new fiscal, thereby ensuring better implementation.
The practice of presenting a separate budget for Railways has been a 92-year old tradition. The scrapping of the rail budget would lead to presentation of a single Appropriation Bill, including the estimates of Ministry of Railways, thereby saving precious time of Parliament by not having to hold separate consideration and passing of two Appropriation Bills.
The Cabinet also approved removal of distinction between Plan and Non-Plan expenditure as the present classification resulted in excessive focus on former with almost equivalent neglect to items such as maintenance which are classified as non-Plan.
The Cabinet felt it is the total expenditure, irrespective of Plan or Non-Plan, that generates value for the public. Plan expenditure was for the first time presented separately in the budget for 1959-60.
(With inputs from PTI)
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