Expenditure Budget format rejig likely

The Budget for 2017-18 could see a major change in the way the expenditure budget is presented. Several heads are likely to be clubbed and presented under broad heads, top government officials involved in the process said.

For example, railways, roads and highways, and shipping could form a section within the Budget as an omnibus transport sector. There could be clubbing of other expenditure heads, too. Social sector ministries, such as health, education and social justice, might form another such subset.

"This is akin to presenting a mini-Budget for each sector of the economy," a minister in one of the economic ministries said about the process.

Also, to provide continuity with the numbers from last year, there will be cross-references.

Some of those explanations could be included in the Budget speech itself.

The changes in the presentation of Budget expenditure numbers will make it easy to figure out the direction of government expenditure instead of the current alphabetical classification, the officer said. It has become possible since the Budget for 2017-18 will do away with the distinction between plan and non-plan, in vogue since 1951. In its place there will be revenue and capital expenditure. With the new classification it is easy to club the capital expenditures for similar sectors together in the Budget papers to give a clear understanding of the level of investment envisaged, he said.

"In the absence of easy markers like plan expenditure, there could be un-informed speculation instead", he said.

The other elements of the mega changes in the Budget process envisaged for 2017-18 are also falling into place.

The Budget will most likely be tabled in end-January or early February. After a recess, Parliament could assemble again in March to pass the Budget before March 30.

The Central Statistics Office has informed the finance ministry it will not be difficult to produce an estimate for the gross domestic product (GDP) for this year, subtracting the fourth quarter and adding on the last quarter of the previous financial year.

The GDP data is the base on which the key percentages, including the fiscal deficit, are calculated.

"The chief reform measure I would say is the amalgamation of the railway Budget within the general Budget," one of the officers involved in the exercise said.

Till now, the stress on railways often took away the emphasis within the government on holistic development of other similar sectors such as road and shipping. "You could say the first stage in substantive reforms in the railways begins with this Budget," he added.

The current emphasis within the finance ministry is to make the railway Budget exercise sit well within the general Budget. While the railway numbers will not inflate the government expenditure, the Budget managers are keen to ensure that the presentation shows the needs of the railways and the extent to which the government has responded to them.

This is likely to change a key metric the railways uses to show its health - the operating ratio, or the amount of money railway spends to earn each rupee. The estimate could throw up a nasty surprise, said one of the officials.

Within railways, the reform in its accounts has already stirred Rail Bhawan. It has sent out instructions to zones to tailor their numbers accordingly. Details of traffic estimates, additions to rolling stock and public expenditure on wages for staff and pension liabilities are expected to be relegated to accompanying documents.