Government favours a January budget

It a very positive thing and will bring in certainty once the budget is presented at the beginning of the year.

The government is keen to conclude the process by March so that the budget spending and tax proposals can start to happen from the beginning of the financial year.

Top sources said the finance minister has begun discussions on the proposal with top bureaucrats in his ministry.

Economists are divided on the proposal, though.

“What is the point of a budget in January? Are we transitioning to the calendar year as the fiscal year?” asked a former chief economic adviser to the finance minister.

DK Joshi, chief economist at CRISIL, a credit rating firm, backed the move. “It is a very positive thing and will bring in certainty once the budget is presented at the beginning of the year.”

The finance ministry official who confirmed the proposal said the government’s prebudget consultations on taxes and policy changes will likely begin from September, instead of October in the past.

There are several other changes that next year’s budget will likely contain.

If the April 1, 2017, deadline DK JOSHI, chief economist at CRISIL, a credit rating firm for implementing a nationwide goods and services tax (GST) is met, Part B of the budget speech, which contains tax proposals, will mostly contain direct taxes and customs duties as other indirect taxes will be subsumed in the new uniform tax regime.

The government is examining the option of merging the rail and general budgets beginning next year, ending a 92-year-old practice. A common budget will allow a seamless national transportation policy, insulating the railways from political pressures.

The government will, as finance minister Arun Jaitley announced in his budget speech this year, do away with the “plan” and “non-plan” expenditure distinction, which is the practice, beginning 2017.