The Centre is all set to propose a new Parliamentary calendar as it moves to end the system of securing a vote on account for expenses undertaken in the weeks pending the completion of the approvals process for the Union Budget every year. Completion of the budget exercise in Parliament on or before March 31 can eliminate the need for securing the vote on account, a constitutional necessity.Lasts till May
Normally, the pre-budget preparatory cycle starts towards the end of September of the current year and lasts till May of the next financial year. Since Parliament is not able to vote the entire budget before the commencement of the new financial year (April 1), the necessity to keep enough finance at the disposal of the government in order to allow it to run the administration of the country remains. A special provision is, therefore, made for “Vote on Account” under Article 116 by which government obtains the Vote of Parliament for a sum sufficient to incur expenditure for a part of the year. It is normally taken for two months but during election years or when it is anticipated that the main Demands and Appropriation Bill will take longer than two months, the vote on account is for a period exceeding two months.
According to a Finance Ministry official, it is planning to seek the Cabinet’s approval for advancing by a few weeks the budget session for which Parliament is generally convened around the third week of February and also a new date for presenting the Union Budget to Parliament. The Ministry will also write to Lok Sabha Speaker Sumitra Mahajan as well as to the Estimates Committee of the House headed by Dr. Murli Manohar Joshi in this regard. The change in the calendar could in turn necessitate moving back the Winter Session, which normally ends in the last week of December, the official said.
The need for pushing back the budget session arose after several States — in a committee headed by the Union Finance Secretary — and some Ministries demanded that the annual budget exercise should be completed before the beginning of the new fiscal year on April 1 for streamlined allocation of funds.GST factor
The realignment of the Parliamentary calendar is also partly triggered by this year’s one-time need for speedy approvals and subsequent implementation of the Goods & Services Tax (GST). The next budget, likely to contain the tax rates, must be approved before the roll-out by the Centre and States of the new tax that will subsume indirect taxes on the target deadline of April 1, 2017.
By convention, the Union Budget is presented each year on the last working day of February by the Finance Minister to Parliament. It is presented in two parts i.e. the Railway Budget pertaining to Railway Finance and General Budget which gives an overall picture of the financial position of the Centre including the effect of the Railway Budget.
The Centre is also mulling if the practice of the separate Railway Budget should be discontinued.
The ‘budget system’ was introduced in India on 7 April, 1860. The first Indian Finance Member James Wilson delivered the budget speech expounding the Indian financial policy as an integral whole for the first time. Post-Independence, the first Budget was presented on November 26, 1947 by India’s first Finance Minister R.K. Shanmugham Chetty. Although the Constitution does not mention the term ‘Budget’, Article 112 provides: “the President shall in respect of every financial year cause to be laid before both the Houses of Parliament, the House of People (Lok Sabha) and the Council of States (Rajya Sabha), a statement of the estimated receipts and expenditure of the government for that year.”
Separately, a government committee headed by former Chief Economic Adviser Shankar Acharya is examining if the financial year should be changed to coincide with the calendar year.