Thursday, October 6, 2016

Finance Ministry may present Union Budget on February 2: Report

The Finance Ministry may present Union Budget on February 2, Sources told CNBC TV 18. The sources also told the news channel that Parliamentary Standing Committee has highlighted some concerns on the merger of the Rail & Union Budget and the final views on the merger will be taken in the Winter Session of Parliament.

Explaining the objective behind the proposed budget reforms, sources said, Finance Secretary Ashok Lavasa informed the members of the Parliamentary Standing Committee on Finance of different aspects of the reform process. 

As per the practice, the general budget is unveiled in Lok Sabha on the last working day of February. Lavasa answered queries of members about the pros and cons of merging the Union and Railway budgets. Some members raised queries about the fate of dividend received by railways from its PSUs, sources said.

As per government’s plan, the budget could be presented latest by February 2 and then Parliament would go in for recess around February 10 and meet again around March 10. Thereafter, the parliament would have time to discuss and pass the Budget and Finance Bill by March 31, the last day of the financial year.

The Cabinet, chaired by Prime Minister Narendra Modi, last month approved advancing the Union Budget date, as against the traditional practise of the last day of the month of February. “The Budget exercise will be completed before March 31,” said Finance Minister Arun Jaitley. This is part of an overhaul that is also meant to scrap the practice of a separate railway budget. 

Cabinet has also approved the proposal to do away with the plan and non-plan expenditure distinction. According to the proposal, the government will advance the entire Budget-making exercise by 3-4 weeks. This is being done with the purpose of completing the legislative part of financial business before April 1, the start of a financial year.

The idea is to get the Budget passed by Parliament along with Appropriation Bill and the Finance Bill before March 24. This would ensure implementation of the Budget proposals from April 1. With the rollout of the goods and services tax (GST), the changes in excise and service tax, which are normally proposed in the general budget, would shift to the GST Council and hence, there would be less onerous Finance Bill for Parliament to debate, sources said.

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