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In a first, government’s spending process to begin from 1 April

LiveMint logoLiveMint 31-03-2017 Staff Writers

For the first time the government’s spending process, linked to the Union budget, will begin from 1 April.

This is the result of the decision of the Bharatiya Janata Party-led National Democratic Alliance (NDA) to advance the presentation of the Union budget to 1 February and ensuring Parliamentary approval in FY17 itself.

As a result, the government will be able to initiate its annual spending, particularly on social sector schemes, from 1 April instead of the customary date of 1 June—owing to the Union budget getting Parliament’s nod only in the third week of May earlier.

A finance ministry official, speaking on condition of anonymity, said from 1 April money will be made available to all departments and ministries. “They will not have to wait for it or seek any permission. It is now up to them to plan their expenditure. Finance ministry will only keep a tab on the quarterly expenditure norms that they have to follow,” he added.

Finance minister Arun Jaitley, in his budget speech, said that the presentation of the budget had been advanced to 1 February to enable Parliament to avoid a vote on account and allow passage of a single Appropriation Bill for 2017-18, before the close of the current fiscal year.

“This would enable the ministries and departments to operationalize all schemes and projects, including the new schemes, right from the commencement of the next financial year. They would be able to fully utilize the available working season before the onset of the monsoon,” he said.

A road ministry official concurred.

“Earlier, we used to plan in April-May and then works used to be implemented from August-September onwards and from January onwards again we would be busy with financial planning. As a result of this, oversight of projects by top executives was not possible. But with the government’s fresh approach, the ministry will get more time for better monitoring,” the official said.

Railways ministry spokesperson Anil Saxena said the move will help in better planning and allocation of work that will lead to early outcomes by the end of the fiscal. “The planning process and implementation is now more streamlined because of early presentation of the Union budget. It will also help us to work out our finances in a better way,” he said.

Apart from the infrastructure ministries, the early parliamentary nod to the budget will also give more manoeuvring space to social sector ministries. “The passage of the budget in March means the government can start disbursing money for several key social sector programmes like Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). If the budget had not been passed, the government would have brought in a vote on account and that means we can only disburse a certain portion of the budget. If the finance bill is passed we can disburse as much as 50% of the budget in April, which means less delay in payment of wages under MGNREGS for example. Now the gap between demand for funds and disbursal of funds is less,” a rural development ministry official said on condition of anonymity.

Echoing the sentiment, Ashok Dalwai, additional secretary at the agriculture ministry, said, “It not only allows us to finalize priorities, it also gives us enough time to get the necessary approvals from the finance ministry for release of funds to states.”

“For a production-oriented department like agriculture, where farmers begin preparations (for the rain-fed kharif crop) by April, we can now better implement schemes on horticulture development and the National Food Security Mission among others,” Dalwai said.

An aviation ministry official, who did not wish to be named, said it does not help the ministry much. “Budget contains round-the-year announcements. A week here and there doesn’t matter. For aviation, no such (direct expenditure) schemes are announced and most announcements are long term in nature,” he added.

Asit Ranjan Mishra, Jyotika Sood, Elizabeth Roche, Sayantan Bera and Tarun Shukla contributed to this story.

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