NEW DELHI: A new format of Budget statements and finance accounts to classify all expenditure of states as well as the Centre on 'revenue' or 'capital' basis is scheduled to be unveiled for the year 2017-18.
Government has set up a committee to prepare the guidelines for the same.
The new guidelines of expenditure will replace existing Plan and Non-Plan distinction. This, will facilitate linking expenditure to outcome and better public expenditure management, simplification of accounting heads and grouping of expenditure as revenue or capital would reflect direction of public expenditure in a better way.
Finance Secretary Ratan Watal on Monday assured the states that the planning will not go away and there would be a medium term planning framework so that the financial approval of schemes and projects could be synchronized with the Finance Commission Cycle.
Addressing conference of state finance secretaries, Wattal said "We also need to move to a cost centre approach, where establishments, schemes and projects are treated as such, and revenue-capital distinction will be the basis of expenditure classification as required by the constitutional framework."
Finance Minister Arun Jaitley in has in the past reiterated that successive committees have questioned the merit in having Plan and Non-Plan classification of Government expenditure. A broad understanding over the years has been that Plan expenditures are good and Non-Plan expenditures are bad resulting in skewed allocations in the Budget, he had said.
Watal said it is important not to get obsessed with a particular growth number, but to create conditions for a sustained and balanced growth that can "incrementally raise India’s per capita incomes over the next two decades, giving Indian’s their rightful place in the comity of nations.