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Early budget will make funds available at start of fiscal, says PM Modi

Prime Minister Narendra Modi today said advancing the date of budget presentation would help getting funds authorised for different sectors at the start of the fiscal, even as he stressed that people do not mind paying taxes if their money is spent properly.

Addressing economists at Niti Aayog’s meeting on ‘Economic Policy The Road Ahead’, he said that a change in the budget cycle would have an impact on the real economy.

“The date of budget presentation is being advanced so that expenditure is authorised by the time the new financial year begins,” the Prime Minister said.

The government is proposing to present the budget for 2017-18 on February 1 instead of the regular date of February 28. Also, there will be no separate railway budget for the next fiscal as the government has decided to merge it with the general budget.

Modi said under the existing budget calendar, the authorisation of expenditure comes with the onset of the monsoon which results in government programmes remaining relatively inactive in the productive pre-monsoon months.

During the two-hour meeting, Modi also underlined the need for greater cooperation among different wings of the government.

Modi said the Central Board of Direct Taxes (CBDT) and Central Board of Excise and Customs (CBEC) should not work in silos and share data, Niti Aayog Vice Chairman Arvind Panagariya said while briefing reporters about the meeting.

The Prime Minister said it is not that taxpayers do not want to pay taxes, but only that the proceeds should be utilised well, Panagariya said.

If someone sees that his or her tax revenue is used to build, say a hospital, nobody will hesitate to pay tax, but when expenditure is not properly done, then people want to evade, Panagariya said summarising Modi’s intervention.

Asked whether the issue of demonetization figured in the meeting, Panagariya said it was mentioned only as part of formalisation of economy.

One of the experts, however, said fiscal consolidation should not be a problem for government in wake of the likely gains of demonetization.

Panagariya added the Prime Minister and Finance Minister Arun Jaitley listened to the views of experts on three areas — agriculture; jobs, skills and education; and budget.

Seeking views of the economists for the forthcoming budget on areas such job creation, agriculture, skill development and education, Modi underlined the need for engaging the youth for speeding up economic development.

During the meeting with the Prime Minister, economists shared their views on various themes such as agriculture, job creation, taxation, education, digital technology, housing, tourism, banking, governance reform, data driven policy and future steps for growth.

Farm sector experts suggested incentivising states to undertake market reforms, create corpus fund for promoting farm mechanisation and micro irrigation, and provide interest subvention for term loans, among others, to double farm income by 2022.

The economists and experts who attended the meeting included Pravin Krishna, Sukhpal Singh, Vijay Paul Sharma, Neelkanth Mishra, Surjit Bhalla, Pulak Ghosh, Govinda Rao, Madhav Chavan, N K Singh, Vivek Dehejia, Pramath Sinha, Sumit Bose and TN Ninan.