Highlights of budget-related decisions of India’s Cabinet

The following are the highlights and implications of the three budget-related decisions taken by the Union Cabinet at a meeting presided over by Prime Minister Narendra Modi on Wednesday:

Merger of Railway Budget with the General Budget:

– Distinct identity of Indian Railways will continue as a departmentally-run commercial unit

– Functional autonomy and financial powers will be retained by the Railways

– Railways will continue to meet their revenue expenditure from revenue receipts

– Railways will no longer pay dividend to the government totalling Rs 9,700 crore

– The merged budget will help present a holistic picture of government’s financial position

– It will cut legislative and procedural requirements.Advancement of the Budget presentation:

– Advancement of budget will help complete related legislative business before March 31

– It will enable better planning and execution of schemes from the beginning of a fiscal year

– This will preclude the need for vote on account by the Lok Sabha

– It will enable the implementation of legislative changes in tax laws from the beginning of a fiscal

Merger of plan and non-plan classification of budget:

– Earmarking of funds for the Sscheudled Castes, the Scheduled Tribes and related subjects will continue

– Plan and non-plan expenditure distinction had led to fragmented view of resource allocation to various schemes

– It was becoming increasingly difficult to ascertain the cost of delivering a service and to link outlays with outcomes.

– The focus on plan expenditure had led to a neglect of expenditures on maintenance of assets and for providing essential social services.

– The merger is expected to provide corporate-style budgetary framework having a focus on revenues and capital expenditure.

–IANS

ap/tsb/vt

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