Favouring the proposal to prepone the presentation of Union Budget to January, head of the apex direct tax authority CBDT Rani Singh Nair on Tuesday said it will bring in “more efficiency” as public expenditure will start from first day of the financial year.
As part of larger exercise of Budget overhaul, government is looking at advancing the dates of its presentation in Parliament by a month to January-end to ensure that the whole process is completed before the new financial year begins.
“If you have the Budget…In January, you get President assent by March 31. The financial year starts on April 1. So from first day of financial year outlays will be in place, expenditures will be allocated and therefore we will not lose two/three months of financial year in budget process. It will bring in more efficiency in Budget making,” said Nair, chairperson of CBDT.
The Central Board of Direct Taxes (CBDT), the apex decision making authority in matters of income and corporate taxes, is planning to start pre-budget meetings with various ministries and department from next month itself as against the usual practice of holding such consultation in November.
“The budget is presented on February 28/29 and by the time it…Gets assent of President it is around May 15. So for April and May, we have to take a Vote on Account. So expenditures at that time in all ministries is only allocated what was in earlier year. It also makes a duplication of process…,” she said, adding that “it is just a discussion and the option is being explored”.
The thinking behind advancing the general Budget presentation is it will streamline expenditure.
Currently, as the full Budget gets passed by May, most of the expenditure currently happens in the third or fourth quarter of the financial year. If the Budget happens in January, expenditure can be streamlined.
While the Constitution does not mandate any specific date for presentation of the Budget, it is usually presented on the last working day of February and the two-stage process of Parliamentary approval takes it to mid-May.
The Finance Ministry is of the view that if the process is initiated earlier, there will be no need for getting a Vote-on-Account and a full Budget can be approved in 1-stage process before March.