Prime Minister Narendra Modi in a speech given on 26 October had given a straight indication that Budget 2017 would be presented a month in advance. Urging the states to align their plans according to the revised date of budget presentation, Mr. Modi had quoted that, “The new system would ensure speedier implementation of schemes.”
While giving the budget scheme, Hon. Finance minister Mr. Arun Jetly Quoted supporting the advance presentation of the budget that, “Madam Speaker, the Budget for 2017-18 contains three major reforms. First, the presentation of the Budget has been advanced to 1st February to enable the Parliament to avoid a Vote on Account and pass a single Appropriation Bill for 2017-18, before the close of the current financial year. This would enable the Ministries and Departments to operationalize all schemes and projects, including the new schemes, right from the commencement of the next financial year. They would be able to fully utilize the available working season before the onset of the monsoon.”
In this article, we are going to focus on the first reform only, i.e. advance presentation of the budget on 1st February, 2017.
Effects of the advance presentation of the budget
There are few major effects of the advance presentation of the annual finance budget, which can be listed as follows-
ü The advancement of the budget announcement date will help the entire budgetary exercise to be over by, and the finance bill to be passed and implemented from 1st April onwards instead of June. It will help companies, individuals to finalized their savings, investment and tax plans in an early period of time.
ü Earlier, after presenting the annual budget the cabinet were getting only last month to get all the legislative approvals for the annual spending and tax proposals. But now onwards, as the process is initiated early, it will help to get this exercise by 31st of March and the government expenditure as well as tax proposals can come in force from 1st of April which will ensure better implementations of the proposed policies.
ü It had also decided to scrap a distinction between plan and non-plan expenditures in the annual budget besides advancing the date of the general budget, usually the last working day in February, to ensure proposals take effect from April 1.
Every subject has two sides. The one which stated above and the another which is ‘political’.
Political views of the advance presentation of the budget.
Opposition parties, including BJP’s Maharashtra ally Shiv Sena, had alleged that Bharatiya Janata Party would get an undue advantage by presenting the Union Budget just before the elections starting February 4 in Goa and Punjab. Other three states going to the polls are Uttar Pradesh, Manipur and Uttarakhand. The opposition parties also claim that announcing Budget before the elections would amount to the violation of the Model Code of Conduct (MCC) for parties.
To support their claim, they have cited the example of 2012 Assembly elections when the Budget was announced after the polls. On its part, the government said that, “Budget presentation is a Constitutional exercise for the benefit of the entire country, not just a few states. Modi government had last year decided to advance Union Budget presentation from the last day of February to make the early distribution of Central funds for development works possible.”
A few more facts here would further clarify why opposition’s argument is not much sustainable, until the EC decides otherwise.
a) The Budget is always allowed to be presented on schedule unless it clashes with Lok Sabha elections. In that case a vote on account is taken.
b) In case of Budget announcement before state Assembly election, the ECI expects from the government not to announce anything aimed at voters of the state. For instance, ECI allowed the government to announce a new MSP for raw jute for 2013-14 ahead of Assembly election in Karnataka as the state didn’t have any share in jute production, according to IE.
c) The Election Commission always keeps a watch on whether an announcement is aimed at influencing voters and take necessary action. For instance, then HRD minister Arjun Singh had to face the wrath of the EC when he announced 27% reservation for OBCs in Centrally-funded institutions. The MCC for Assembly elections in Assam, Kerala, Tamil Nadu, West Bengal and Pondicherry was in force then. The government later had to clarify that no such decision was taken.
In addition to that, Supreme Court stating against the petition filled by advocate M L Sharma which stated that, “The Centre be directed to present the Union Budget in the financial year 2017-18 which would commence from April 1, instead of the proposed date of February 1” said that, “There is no illustration to support that presentation of Union Budget would influence voters' mind in state elections”
Though the intentions of presenting the budget might not be the same as stated by opposition parties but indirectly it has shown the impact on the recent results of the various state elections’ results.