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Vote-on-account or full Budget: What will the Modi government do?

22 November, 2018 7:22 AM
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Vote-on-account or full Budget: What will the Modi government do?

The Budget for FY20 will be the last one presented by this government before the general elections in May and as per established practice, it must be a vote-on-account, not a full Budget

Hinting that it will retain its place at the helm after next year's Lok Sabha elections, the Narendra Modi-led government has reportedly proposed presenting a full Budget for FY20 on February 1, sources told Mint.

The Budget for FY20 will be the last one presented by this government before the general elections in May and as per established practice, it must be a vote-on-account, not a full Budget.

By presenting a vote-on-account, the government seeks Parliament's approval for expenditure from the Consolidated Fund of India till such time that a new government is appointed.

This would not be the first time that the Modi government is doing away with an established practice when it comes to presenting the Budget.

Earlier, it pushed back the date for presentation of the Budget to February 1, as against February 28/29 to ensure that government departments can start spending as soon as the new fiscal year starts.

The decision to go for a full Budget instead of a vote-on-account is because the government believes the economy cannot afford to lose its direction in a period when a new government takes over at the helm.

"As long as no major policy changes including tax policy are undertaken in the budget and expenditure approval is taken for the relevant period, then it would be an appropriate approach," DK Srivastava, Chief Policy Advisor at EY India, was quoted as saying.

Central government departments and ministries received a letter about this from North Block on October 18, followed by many reminders, inviting consultations for Finance Minister Arun Jaitley's Budget speech by November 30.

A government official told the paper that through this move, the Centre will signal continuity. The official also said that the economy cannot be dislocated because of elections.

A full Budget means there will be an Economic Survey, which is a report card for the previous year. Publishing the Economic Survey is usually left for the next government to do.

A search committee headed by former Reserve Bank of India Governor Bimal Jalan is looking for the country's next chief economic adviser, while the government is trying to fill the post of senior economic adviser.

Source: moneycontrol.com

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