Union Budget 2021: Finance Ministry to start budgetary exercise from Oct 16

The Finance Ministry issued a Budget circular on Thursday evening, which contains necessary instructions and deadline for submission of details by different central ministries and departments

The Finance Ministry will kick off exercise for the Union Budget 2021-2022 on October 16. The Budget is expected to be presented on February 1, which is the first working day in that month.

The Budget division of the Economic Affairs Department issued a Budget circular on Thursday evening, which contains necessary instructions and deadline for submission of details by different central ministries and departments.

“In the special circumstances of this year, the basis of the final budgetary allocations will be first and foremost overall fiscal position, and subject to that the absorptive capacity of the Ministry/Department.” the circular said.

Pre-Budget meetings shall begin from 16th October, 2020 and shall continue till the first week of November, 2020. With this, ministries will allocate their budgeted funds which will be required from beginning of new financial year 2021-22.

The budget estimates for 2021-22 will be provisionally finalised after Secretary (Expenditure) completes discussions with the Secretaries and Financial Advisers, it noted.

“Ceilings for all categories of expenditure, including Central Sector and Centrally Sponsored schemes will be discussed. Accordingly, the RE 2019-20 and BE 2020-21 for all categories of expenditure, and select schemes/projects specifically included in the MTEF (medium term expenditure framework) Statements, may be indicated separately for Revenue and Capital expenditure," the Budget circular said.

Recently, finance ministry said that it is not able to submit the rolling target of MTEF for FY22 and FY23, according to the provisions of the Fiscal Responsibility and Budget Management Act. As due to pandemic, it is difficult to obtain reliable protection of GDP growth.

However, the final ceilings for the schemes will be decided separately by the Finance Ministry by Jan 15 taking into account the resource assessment of the government and the available fiscal space.

The circular further said that Union Budget of FY22 budget will contain the recommendations of the 15th Finance Commission which is expected to submit its second and final report by end of this month.

Budget circular also proposed to discuss the totality of the requirements of funds for various programmes and schemes, along with receipts of the Departments (viz. interest receipts, dividends, loan repayments, departmental receipts, receipts of Departmental Commercial Undertakings, etc.) during the pre-budget meetings chaired by Secretary (Expenditure).

All the Ministries and Departments are required to submit details of all the Autonomous Bodies, for which a dedicated corpus fund has been created, clearly indicating the purpose, whether in Public Account, accumulated balances as on March 31, 2020, annual expenditure for the last three years and allocations made during the current financial year.