Outcome Budget norms tightened;depts to meet objectives timely

In order to improve the quality of public expenditure, the Finance Ministry has tightened norms under which each ministry and department will have to prepare an Outcome Budget in consultation with NITI Aayog to achieve certain objectives within a timeframe.
As per the ministry's directions, every ministry will have to prepare an outcome budget statement linking outlays against each scheme as well as project with the deliverables and medium term outcomes.
A finance ministry official, involved in Budget making, said every "allocation for scheme/project will be against a firm set of deliverables which will need to be adhered to".
The 'Outcome Budget' is to be prepared after finalisation of the estimates for budgetary allocation, the official added.

"The outputs/deliverables should be mandatorily given in measurable/quantitative terms on the basis of parameters and deliverables decided in advance in consultation with Department of Expenditure and NITI Aayog," the official said.
Through "outcome-based budgeting", the ministry is trying to shift from traditional performance-based budgeting by planning expenditure, fixing appropriate targets and quantifying deliverables of each scheme.

The outcome-based one will outline what can be achieved with what is being spent and will involve the process of defining the desired long-term outcome of schemes of various ministries.
The move towards outcome budgeting is part of the overhaul of budget making exercises, under which Union Budget would be presented in Parliament on February 1, instead of age -old tradition of unveiling it on the last day of the month.

Plan expenditure, which entails government spending on social welfare schemes and asset creation, was hiked by 15.3 per cent to over Rs 5.5 lakh crore for 2016-17 fiscal.
However, from next fiscal the classification of expenditure as 'Plan/Non Plan' will be replaced with 'Capital and Revenue' Expenditure.
Under this, significant expenditure incurred with the object of acquiring tangible assets of a permanent nature (for use in the organisation and not for sale in the ordinary course of business) or enhancing the utility of existing assets, shall broadly be defined as 'Capital' expenditure.
Besides, subsequent charges on maintenance, repair, upkeep and working expenses, which are required to maintain the assets in a running order as also all other expenses incurred for the day to day running of the organisation, including establishment and administrative expenses shall be classified as 'Revenue' expenditure.

With the merger of Rail Budget with General Budget, the receipts and expenditure of the Railways the Demands for Grants and the Statement of Budget Estimates of Railways will also be part of the General Budget.