The Union budget has undergone a transformation under the Modi administration, according to Finance Minister Nirmala Sitharaman, going from just a simple accounting of expenses to a strategic plan for fair distribution. The Union minister emphasized that the administration will keep using public funds as efficiently as possible to maximize their worth.
She emphasiZed how the Modi government promoted openness in its budgeting procedures and figures in a series of tweets on X, the former Twitter platform. International organizations like the IMF and World Bank frequently have a more positive opinion of countries that have clear budgets. She suggested that this might result in increased worldwide confidence.
"This is in sharp contrast to the UPA administration led by @INCIndia's repeated practises of concealing the deficits by borrowing outside of the budget and issuing 'Oil Bonds,' which rather subtly transferred the financial burden to future generations. One of her postings stated, "Under the UPA, standard fiscal practices were routinely changed to make Budget numbers look favourable." According to Sitharaman, the Union Budget's sanctity and credibility have significantly improved over the past ten years, eclipsing previous limitations and antiquated methods. This is an analysis of her posts.
Budget Cycle Advancement
According to her, the budget presentation on February 1st has successfully accelerated the spending cycle by two months and guaranteed that ministries would have access to the whole budget starting on April 1st, the start of the fiscal year. "This helped states plan their budgets better as details of the Centre’s fiscal plan was available to them earlier than before."
Combining the Rail Budgets
The FM said that combining the Rail Budget with the Union Budget in FY18 provides a "holistic & transparent picture" and that there was no "sound administrative reason" for a Rail Budget. "Number of Demands for Grants operated by Railways has been reduced from 16 to one, and appropriation for Railways is part of the main Appropriation Bill," she stated.
Removal of Plan and Non-Plan Classification
According to Sitharaman, the emphasis has changed from revenue and capital spending to the elimination of the distinction between plan and non-plan expenditure.
The impression of the two types of allocations was distorted, FM claimed, since the two categories produced 'false differentiation'. Plan was viewed as "good" and frequently called "developmental expenditure," but non-plan was viewed as "bad" and incorrectly denoted "non-developmental outlays." This difference and image were false, she said, because there was a reluctance to budget for "non-plan expenditure," which included crucial defense systems, insurance and pension plans, welfare programs, and subsidies for the impoverished and destitute.
Put transparency First
In addition, the FM emphasized that the current government places a higher priority on budgetary openness than the previous administration did, which borrowed money outside of the budget and issued "Oil Bonds." She said that these actions "quite subtly shifted the fiscal burden to future generations."
"Under UPA, standard fiscal practices were routinely changed to make Budget numbers look favourable" , she said. According to FM, transparent budgets foster greater international confidence and are seen more favorably by organizations like the World Bank and the IMF.
From FY23 onward, budgetary allotments to the railway and road transportation sectors have been greatly increased, decreasing reliance on market borrowing.
Additional Request for Funds
It was determined to cap the quantity of Supplementary Demands for Grants to two, which are currently submitted during the Winter and Budget Sessions, starting in FY 2022–2023. She said that as a result, the process of budget estimating has significantly improved, as has financial discipline.
Larger contingency Fund Corpus
FM Sitharaman drew attention to the pitiful sum of Rs 500 crore over time, in spite of the Center's Budget costs growing exponentially over time. "This squeeze was felt during Covid-19 years, and then on, the corpus of the has been raised to Rs 30,000 crore in FY22," she stated.
Efficiency of Expenditure
By lowering unused and parked monies, the Finance Ministry has also improved the efficiency of its spending. The purpose of the 2017–18 Treasury Single Account (TSA) reform was to do away with bulk disbursements to different Autonomous Bodies. This 'just-in-time' funding disbursement reduced the government's borrowing expenses. "It is important to mention that even the large agencies such as ICMR, UGC, BSNL, NHAI etc., are receiving funds from the government through TSA," she stated. According to her, TSA has so far saved more than Rs. 15,000 crore.
Agency with Only One Node (SNA)
In the past, it was difficult to tell if funds were coming from the state or the center, as well as how much money was issued to the implementing agencies under a CSS and when. Every state must choose a Single Nodal Agency (SNA) for each Centrally Sponsored Scheme (CSS) in accordance with the SNA model.
State governments must create a single nodal bank account in a scheduled commercial bank and transfer the CSS monies received from the center, together with their proportionate share, within a certain time frame. Interest is also paid on funds held in a single nodal bank account. From 2021 until the present, interest earned in SNA bank accounts has saved almost Rs 10,592 crore.
Digital Spending Plan
Our budget materials have become more linguistically straightforward over time, with an emphasis on basic Hindi and English (which is then translated into various regional languages) to make our goals for the year understandable to readers nationwide. Since all pertinent information and papers are included in annexures, openness has not been compromised in the process. The amount of printed copies has decreased because of this ecological effort, which has also improved the efficiency of the budget laying procedure in Parliament.
