New Delhi: Sticking to the practice started last year, finance minister Arun Jaitley will present Union Budget 2018 on 1 February, the last budget of the National Democratic Alliance (NDA) government before the 2019 Lok Sabha election, a senior government official said.
In 2016, the government advanced the budget presentation to the first day of February, departing from the practice of presenting it on the last working day of the month, to give more time to departments to spend the money allocated to them.
The winter session of Parliament will be truncated because of the Gujarat assembly election, “but there is no question of preponing the budget and (it) will be presented on February 1,” the government official cited above said on condition of anonymity.
The government last year also changed the expenditure classification to revenue and capital expenditure from the earlier classification of plan and non-plan expenditure. It merged the railway budget with the general budget.
It is yet to decide on shifting the financial year to January-December from April-March.
The finance ministry has started the budget-making exercise for the fiscal year starting 1 April with the release of the budget circular in September containing the timelines for submission of information by various departments.
Ministries and departments were asked to submit tentative budget estimates for fiscal 2019 by 30 September.
The government on Monday named revenue secretary Hasmukh Adhia as the finance secretary, completing the team of bureaucrats that will prepare the next budget. Ajay Narayan has been named as the new expenditure secretary after finance and expenditure secretary Ashok Lavasa retired from his post on 31 October. Subhash Chandra Garg and Rajiv Kumar were appointed as the economic affairs secretary and financial services secretary in July and August, respectively while Neeraj Kumar Gupta continues to be the disinvestment secretary.
This will also be the first budget after the goods and services tax (GST) was implemented from 1 July.
The centre now cannot on its own change the indirect tax structure except for customs duties as this would need approval of the GST Council.
This may substantially shift focus of the next budget to quality of expenditure of the government.
The government has not decided on framing a new Fiscal Responsibility and Budget Management (FRBM) Act, as recommended by the N.K. Singh committee. The committee has recommended the formation of a fiscal council and a glide path to lower the fiscal deficit and debt-to-GDP (gross domestic product) ratio to 2.5% and 38.7%, respectively, by the fiscal year 2022-23 from 3.5% and 49.4% in 2016-17.
N.R. Bhanumurthy, a professor at the National Institute of Public Finance and Policy, said that since the next budget will be a pre-election year budget, the focus will obviously be more on social sectors, small-scale firms and creating employment.
“The government’s stand on the N.K. Singh committee report will also decide the fiscal space it has for pushing social sector expenditure,” he added.
Jaitley has already said that he will stick to the glide path for fiscal deficit announced in the last budget, ruling out a breach of the self-imposed fiscal discipline target to boost economic growth. The government aims to contain the fiscal deficit at 3.2% of GDP in 2017-18 and 3% of GDP in 2018-19.