January Budget to Bring More Efficiency, Says Indian Taxman
Favouring the proposal to advance the presentation of Union Budget to January, Rani Singh Nair, the head of the apex direct tax authority, Central Board of Direct Taxes, on Wednesday said it will bring in “more efficiency” as public expenditure will start from the first day of the fiscal.
As part of a larger exercise of Budget overhaul, the government is looking at advancing the dates of its presentation in Parliament by a month to January-end to ensure that the whole process is completed before the new financial year begins.
If you have the Budget...in January, you get the President’s assent by March 31. The financial year starts on April 1. So from the first day of financial year, outlays will be in place, expenditures will be allocated and therefore we will not lose 2-3 months of the financial year in the Budget process. It will bring in more efficiency in Budget-making.Rani Singh Nair, Chairperson, CBDT
CBDT, the apex decision-making authority in matters of income and corporate taxes, is planning to start pre-Budget meetings with various ministries and department from next month itself as against the usual practice of holding such consultation in November.
The thinking behind advancing the general Budget presentation is it will streamline expenditure. Currently, as the full Budget gets passed by May, most of the expenditure currently happens in the third or fourth quarter of the financial year. If the Budget happens in January, expenditure can be streamlined, she said.
While the Constitution does not mandate any specific date for presentation of the Budget, it is usually presented on the last working day of February and the two-stage process of Parliamentary approval takes it to mid-May. The finance ministry is of the view that if the process is initiated earlier, there will be no need for a Vote-on-Account and a full Budget can be approved in a one-stage process before March 31.