New Delhi: Amid a debate on whether the new government will present a full budget or a vote-on-account, finance ministry officials said the ministry has done enough groundwork to enable the government to pass a full budget before 31 July, the day the mandate of the interim budget runs out.
However, the final call on whether it would be a vote-on-account will be a political one which will be taken by the government in consultation with opposition parties, the officials said.
“As far as technical-level preparations are concerned, we are ready and confident that the government can pass the full budget by 31 July this year. But a vote-on-account can still happen if the government wants to take time to deliberate on the finance Bill. It’s a political call,” said a finance ministry official, who didn’t want to be named.
This comes on the day that the new finance minister, Pranab Mukherjee, assumed office and plunged into the budget making exercise with a series of interactions with the finance secretary, the revenue secretary as well as the secretary for disinvestment and the additional secretary for banking.
People familiar with the matter, speaking on condition of anonymity, said the new finance minister is aware of the need to continue with sector-specific stimuli, especially in exports, manufacturing and the infrastructure sectors, to counter the slowdown in economic growth.
The budget division is already working on a fiscal stimulus worth 0.5-1% of gross domestic product for the budget.
At the same time, Mukherjee has reportedly indicated to the budget team that he would like the ministry to return soon to the path of fiscal prudence.
“The finance minister has concerns on the fiscal front but he has also said that he would like the economy to come back soon to a path of high growth,” said finance secretary Ashok Chawla.
People who were present in the meetings with the new finance minister indicate that the budget could be more expenditure-led than be heavy on tax breaks. The social sector and the flagship programmes could see an increase in fund allocation of 10-15%.
Meanwhile, Mukherjee has indicated that the revenue team should explore ways of increasing the tax net and revive the disinvestment process of public sector units that are already lined up for stake sales.