The Finance Ministry has kicked-off exercise for the General Budget 2020-21. The Budget is likely to be presented on February 3, which is the first working day in that month.

The Budget division of the Economic Affairs Department has issued a Budget circular which contains necessary instructions and deadline for submission of details by different Central Ministries and Departments. “The pre-Budget/RE (Revised Estimate) meetings will begin on the October 14, 2019,” the circular said.

Even though the circular does not give an exact date of the presentation, it is expected that the Budget will be presented on February 3, as it was first working day of that month. The Budget date has been first working day of February since 2017-18.

Focus on revenue

The focus would be on revised estimate for earnings, expenditure and fiscal deficit.

Since the Finance Minister Nirmala Sitharaman, herself, said that corporate tax restructuring would result in revenue foregone of ₹1.45 lakh crore, it is bound to impact the overall revenue collection. At the same time, collections from direct tax and GST have been below the estimates. This means overall tax collection target of ₹16.49 lakh crore is going to be very challenging.

It is expected that non-tax revenue, such as disinvestment proceeds (Budget estimate is Rs 1.05 lakh crore), will be on track or be even higher than the Budget estimates.

However, this is not going to bridge the shortfall in direct tax collection. This is gong to impact the fiscal deficit. Even when asked about revision of fiscal deficit, the Finance Minister had said that she would see only at the time of finalising the RE.

The government has set a target of 3.3 per cent for the fiscal deficit in the Budget.

Budgetary allocations

The circular also said that the basis of the final budgetary allocations will be the ceilings indicated in the MTEF (Medium-term Expenditure Framework) statements, which was tabled in the Parliament in the Monsoon session in August, 2019.

Using the allocations indicated in the MTEF statement (including for Select Schemes), each Ministry would decide the allocations in the SBE (Statement of Budget Estimates) format and forward them to the Budget Division.

It is proposed to discuss the totality of the requirements of funds for various programmes and schemes, along with receipts of the Departments (viz. interest receipts, dividends, loan repayments, departmental receipts, receipts of Departmental Commercial Undertakings, etc.) during the pre-budget meetings chaired by Secretary (Expenditure).

All the Ministries and Departments are required to submit details of all the Autonomous Bodies, for which a dedicated corpus fund has been created, clearly indicating the purpose, whether in Public Account, accumulated balances as on March 31, 2019, annual expenditure for the last three years and allocations made during the current FY.

Also read:Dip in GST collections tells a story

The reasons for their continuance should be explained, and why the same should not be wound up and requirements of the Autonomous Body met through Grant-in-Aid.

Budget 2020-21 will be first one incorporating recommendations of 15th Finance Commission. The Commission is expected to submit its report by November 30.

Keeping that in mind, the circular had said that for the Budget Estimates of 2020-21, the allocations will be finalised for the Establishment and Other Central government expenditures as well as the Finance Commission related transfers which are already projected in the Commission’s report and agreed to by the Centre.

For the Central Sector (CS) schemes and Centrally Sponsored Schemes (CSS), tentative ceilings would be discussed during the pre-budget meetings.

Related Topics
comment COMMENT NOW