FinMin to seek Cabinet nod for single Budget

The Railway Budget of 2016-17 may have been the last independent one for the national transporter as the Finance Ministry moves to seek Cabinet approval for merging it with the General Budget.

But the new General Budget will not affect the financial autonomy of the Railways, which will continue to be responsible for its finances, including profits and the wages/pension bill. The combined document may highlight key proposals of the Railways for the ensuing fiscal and include a separate annexure of its expenditure.

Sources said concerns that the Railways’ liabilities and borrowings would affect the Centre’s accounts are unfounded as these get reflected in the balance sheets. “Whatever money the Railways borrows, it is already a part of the government borrowing,” said the official.

Officials from the ministries of Finance and Railways told BusinessLine that the Cabinet is expected to consider the proposal next week.

Simultaneously, the Finance Ministry will also seek Cabinet nod for advancing by four weeks the timeline of the Budget, which has usually been presented towards end February.

“Our goal is to advance the presentation of the Budget to late January or early February,” said a senior official familiar with the development. He added that the practice of Vote-on-Account will also be done away with and the entire Budgetary process completed by March. This, he said, would enable Ministries start spending from April 1, Day 1 of the new fiscal.

The move will help the Centre spend evenly through the financial year. Currently, until the Budget is passed by Parliament, which is usually around May end, Ministries are unable to spend more than a sixth of their annual allocation. As the monsoon sets in soon after, major capital spending gets pushed back to the second half of the fiscal, and often happens in a rush.

The Finance Ministry is understood to be already putting systems in place to speed up the Budget preparation process.

Multiple sources told BusinessLine that the elections to various State Assemblies next year will not prove a deterrent to the budgetary exercise, so long as the Centre does not announce any projects specific to the States going to polls.

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