GS3 (Government Budgeting)
A no. of changes have been proposed to the way the Union budget is prepared or presented. These changes are set to be implemented over the next few years. Elucidate.
Best answer
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In a set of reforms, the Union Govt has brought three major changes:
1. Merging of Railway and General Budget.
2. Advancement of the Budget Presentation Day(by 27 days)
3. Doing away with the classification of Plan and Non-Plan expenditure.
BENEFITS:
1. Railways will now stop being a political plaything and also the legislature will save time since Railway Budget(which is a separate process) will now be merged with the general budget.
2. Distortion in terms of Plan expenditure taking greater share than the Non-Plan expenditure will now be a thing of past.
3. Due to the budget advancement, all processes related to budget might get over by the end of the ongoing financial (also VOTE ON ACCOUNT MIGHT NOT BE NECESSARY)
CHALLENGES:
1. Political will of the States in doing away with the Plan and Non-Plan expenditure.
2. The future of the schemes running under the previous plans is still not clear.
3. Railways might have interference from the Finance Ministry in their financial matters.
4. The Advancement of Budget,initially,might not be based on the complete economic data of the current year.
Nevertheless, coupled with other reforms like GST, these measures will be like a bitter pill to swallow which will be beneficial in the long run.
