The union finance ministry is undertaking a major overhaul of the budget making exercise, including advancing the date for the annual budget presentation to 31 January instead of the usual practice of presenting it on the last working day of February.
This, according to the government, will help to complete the exercise before the beginning of the new financial year, ie, 31 March, facilitating initiation of revenue mobilisation and capital expenditure measures right from the beginning of the fiscal year.
Currently, India follows the April-March fiscal year and all macroeconomic and company data, including the government's budget, are compiled and prepared for the same period.
Next year's budget could also see the abolition of the railway budget, with the finance ministry considering the proposal by railway minister Suresh Prabhu to subsume his separate departmental budget in the Union budget itself.
With the scrapping of the Planning Commission, the finance ministry has little manoeuvring space for budget making and is bound to make it a simple exercise.
Also, with the additional space required for railway budget, which now stands scrapped as a separate exercise, the government needs to streamline the budget in a way to avoid complications (See: Railway Budget to be merged with Union Budget from next year). two decisions of scrapping the railway budget and advancing the date of budget presentation are a major departure from the Raj Era policies followed by successive government so far.
The finance ministry will also finally do away with the distinction between Plan and non-Plan expenditure, which will be replaced with capital and revenue expenditure.
The government feels the Budget exercise should ideally be over by 31 March, against the practice of it being done in two phases between February and May.
While the Constitution does not mandate any specific date for Budget presentation, it is usually presented on the last working day of February and the two-stage process of parliamentary approval takes it to mid-May.
As the financial year begins on 1 April, the government in March takes Parliamentry approval for vote on account for an amount sufficient to meet expenditure on various items for two to three months. The Demands and Appropriation Bill, entailing full-year expenditure and tax changes, is then passed in April / May.
The finance ministry is believed to be of the view that if the process is initiated earlier, there would be no need for a vote on account and a full budget can be approved in one stage before 31 March.
The revenue department is also mulling advancing its pre-Budget meetings with stakeholders to September instead of holding them in November / December.
The expenditure department in its pre-Budget meetings will seek details of their envisaged revenue and capital expenditure from April 2017 to March 2018.
"States are being consulted for capital and revenue expenditure classification. An internal group is working on it. This will give the right direction in simplification of accounts and also how we focus on expenditure," another source said.
In the Budget speech, finance minister Arun Jaitley had announced plans of doing away with Plan and Non-Plan classification from 2017-18, in line with the termination of the 12th Five-Year Plan (2012-17).