Finmin to kick-start #Budget 2018 process this week; circular to be issued soon
Each ministry will reply to the circular with estimates of funds required for 2018-19 along with other inputs for the annual central budget
The finance ministry will issue the budget circular this week to all ministries, departments, and autonomous bodies, setting in motion the crucial budget-making exercise for 2018-19, the National Democratic Alliance (NDA) government’s last full budget in this term.
“The budget circular should be out this week,” a senior government official told Moneycontrol.
The budget-making exercise, which is spearheaded by the finance ministry begins in September-October every year, with each ministry replying with detailed estimates of all the money they will need for the following year—for everything, from special projects to routine expenses and wages. These reams of accounts will then be distilled to form the first broad contours of next year’s budget, which is likely to be presented on February 1 by the Finance Minister Arun Jaitley.
The circular also contains the timelines for submission of inputs of budget requirements to the finance ministry. The ministries provide the actual money spent during the last financial year, along with the budget and revised estimates for current fiscal.
This will be Finance Minister Arun Jaitley's fifth Union Budget that will sport a different look, starting with a lighter 'Part B’ with fewer indirect tax changes because of the implementation of Goods and Services tax (GST) from July 1.
Last year, the government had unveiled the budget a month in advance on February 1, shifting from the colonial-era tradition of presenting it on 28th of the month, in a bid to facilitate the budgeted funds by the beginning of the financial year in April. Distinction between plan and non-plan expenditure was scrapped last year, along with the merger of railway budget with the general budget, marking a shift from nearly a 100-year old practice.
Next year’s budget speech would also have a much lighter 'Part B', the section that contains tax proposals. Under goods and services tax (GST), most indirect taxes including excise, special additional duties and service tax among others have been subsumed in the new tax structure.
The rates are decided by the GST Council, a panel headed by the Central finance minister with state finance ministers as members. Effectively, this takes away a significant part of the central finance minister’s discretionary authority to rule on indirect taxes.After GST, Part B of the union budget speech, will have income and other direct taxes and customs duties, a major parting from the previous practice that when every minor indirect tax change had market and sectoral implications.