With the Goods and Services Tax (GST) set to roll out in a few months, the Union budget will supposedly get thinner. After announcement of Direct Tax Code, length of the budget will be further shortened and the government will focus on policy announcements and detail outcomes of various proposals. Changes on account of GST are expected to reflect from the 2018-19 budget.
Former expenditure secretary, Dhirendra Swarup said, "Part two of the budget where you have the tax rates will be reduced by more than 50 per cent and you will only have direct tax rates. I don't know in what form DTC will come. And the GST rate will be recommended by the GST Council which will then be fixed by Parliament because under the Constitution, only Parliament has the power to decide on taxation." He said the GST rate maybe fixed for two or three years and it may just be mentioned in the budget. "There will be no need to specify individual rates for small items and therefore the part 2 of the budget will be reduced."
CM Vasudev, former economic affairs secretary, said, "The relevance of the budget will not go but degree of secrecy may come down as the recommendations of the council on rates will be in the public domain." He said the power on taxation rests with the Parliament and the part two of the budget will still have to specify the products and services which will fall under the standard rate, merit and demerits.
Next Budget may be presented in January
Meanwhile, the government is looking to change the British-era legacy of presenting the Union Budget on the last day of February and may advance the date by a month. While a final decision is yet to be taken, sources said the government is considering completing the budget exercise before the end of the financial year on March 31 so that policy transmission is faster and departments are able to spend the funds from the start of the year instead of waiting until May for money to be actually allocated.
"We have not decided the date but it may be at the end of January," said a source, adding that preparations for Republic Day have to be kept in mind. Currently, the budget process - including passage of the Appropriations Bill for expenditure and the Finance Bill for tax changes - are cleared by the Parliament in the first or second week of May.
Along with the Budget, the government seeks parliamentary approval for undertaking spending during the few weeks of new financial year. The move comes at a time when the Centre has decided to introduce a slew of changes in economic policy from next financial year, along with changes in the way the budget has been presented.
