Finance ministry starts work on Union Budget 2017

Finance ministry issues the customary budget circular on Friday stating that there will be no five-year plan after the 12th Plan ends this fiscal


The cabinet on Wednesday approved in principle advancing the budget date and the merger of the union and railway budgets. Photo: HT
The cabinet on Wednesday approved in principle advancing the budget date and the merger of the union and railway budgets. Photo: HT

New Delhi: The finance ministry kick-started the budget-making exercise for fiscal year 2017-18 by issuing the customary budget circular on Friday.

Meetings to finalize the revised estimates and budget estimates of ministries and departments are scheduled to start from 17 October and the same will be finalized by mid-January.

The cabinet on Wednesday approved in principle advancing the date of presentation of the general budget, which will from next year include the railway budget. However, it did not announce a date for presenting the budget.

From next year onwards, the government has also decided to do away with the distinction between Plan and non-Plan expenditure, replacing it with a classification based on revenue and capital expenditure.

In the budget circular, the finance ministry said though there will be no five-year plan after the 12th Plan ends this fiscal, it will carry out resource estimation based on the vision document being prepared by the NITI Aayog. “This will help in setting out the resource priorities of the government,” it added.

Also read: Govt hits fast forward on the budget process

The budgeting exercise will shift towards a medium-term framework to give ministries a better idea of resource availability. “This will enable ministries to plan their activities with a medium-term horizon and also shift from input-based budgeting towards output and outcome-based budgeting,” it added.

Based on the medium-term allocations, ministries have been asked to set an outcome/output framework for each scheme implemented by them. “There is also an endeavour to move towards giving ministries maximum flexibility to re-appropriate amongst schemes and components of expenditure within a scheme, required to maximize the achievement of the agreed objectives,” the circular said.

The outcome budgets which are expected to be presented during the budget session of Parliament would also have to be approved by NITI Aayog and department of expenditure. “These documents would form the basis of revised estimates discussions and help decide the allocations for the next year,” the circular said.

Financial advisers have been asked to prepare the Statement of Budget Expenditure for 2017-18 and forward the same to the Budget Division of the finance ministry by 10 October.

“The final ceilings for the schemes will be decided separately by the ministry of finance latest by 15 January 2017, taking into account the resource assessment of the government and the available fiscal space,” the circular said.

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