Highlights of budget-related decisions of India’s Cabinet

The following are the highlights and implications of the three budget-related decisions taken by the Union Cabinet at a meeting presided over by Prime Minister Narendra Modi on Wednesday:

Merger of Railway Budget with the General Budget:

• Distinct identity of Indian Railways will continue as a departmentally-run commercial unit

• Functional autonomy and financial powers will be retained by the Railways

• Railways will continue to meet their revenue expenditure from revenue receipts

• Railways will no longer pay dividend to the government totalling Rs 9,700 crore

• The merged budget will help present a holistic picture of government's financial position

• It will cut legislative and procedural requirements.

  Advancement of the Budget presentation:

• Advancement of budget will help complete related legislative business before March 31

• It will enable better planning and execution of schemes from the beginning of a fiscal year

• This will preclude the need for vote on account by the Lok Sabha

• It will enable the implementation of legislative changes in tax laws from the beginning of a fiscal

  Merger of plan and non-plan classification of budget:

• Earmarking of funds for the Sscheudled Castes, the Scheduled Tribes and related subjects will continue

• Plan and non-plan expenditure distinction had led to fragmented view of resource allocation to various schemes

• It was becoming increasingly difficult to ascertain the cost of delivering a service and to link outlays with outcomes.

• The focus on plan expenditure had led to a neglect of expenditures on maintenance of assets and for providing essential social services.

• The merger is expected to provide corporate-style budgetary framework having a focus on revenues and capital expenditure.