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Q. Overhaul the Budget: Discuss the central governments’ decision to carry out changes in the Union Budget.
Sep 22, 2016 Related to : GS paper-3 and 2

Ans :

Introduction-

Recently central government has decided to bring significant changes in the pattern in which the budget has been presented. The changes intended to bring are to bring more transparency in the system. The changes decided by government are as follows.

  • To advance the general budget's presentation by a month from the present practice of at the end of February.
  • To do away a separate railway budget by merging itself with general budget.
  • To do away with plan and non-plan categorisation.

Why changes and its impact-

  • In the current system the implementation of projects get delayed due to late passage of budget. Advancing of general budget from current last day of February will ensure the Finance Bill is passed before the start of the financial year, on April 1.
  • It will ensure that all central government departments get their full allocations to work with right from the first day. It will enable them to plan their expenditure and ensure expenditure is incurred at an even pace, which is necessary to maintain quality of expenditure and ensure proper monitoring.Separate railway budget was more of a legacy issue and it did not add any value. The final net numbers did enter the Union Budget and hence it made little sense to keep them separated.
  • The Railways Budget was introduced by the British to gauge their own capital expenditure for creating a railway system which was part of their own strategy to move troops and goods across the country. Currently there is no need of separate budget.
  • The declassification of expenditure under the headings of Plan and non-Plan was desired by many experts since long time. With the Planning Commission being abolished and the concept of five year plan being done away with, having such a classification did not really fit in the current scenario.
  • In fact many experts believe that all expenditure is essential and by calling some categories ‘non-plan’ gives an incorrect impression. Hence doing away the classification of plan and non plan is need of the time.

Conclusion-

Recently announced changes in the presentation of budget part of major reform process that central government is carrying. It will ensure efficiency in the budget system also ensure accountability from all departments. Three changes have been decided by the central government will have far reaching implications for the way in which fiscal business is conducted from hitherto.


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