Economic Survey 2023: Major reforms in Union Budget over the last 4 years

The reforms are aimed at allowing better fiscal management

The Union Budget 2023 will be presented on February 1, and the Economic Survey has been tabled ahead of that. Over the years, there have been reforms made to the Union Budget to ensure "greater efficacy in public spending".

Here are the major ones to the Budget in the past four years.

Improved fiscal transparency and realistic revenue assumptions in the Budget

The Union Government sought to improve transparency in fiscal accounts and statements by bringing below-the-line expenditures above it. The government's Extra-Budgetary borrowings were brought down from Rs 1.48 lakh crore in FY20 and Rs 1.21 lakh crore in FY21 to Rs 750 crore in FY22 (RE). In the budget for FY23, there were no estimates for Extra Budgetary Resources.

Apart from cleaner fiscal accounting, last year's budget based revenue projections on realistic assumptions, so there was a buffer for the government amid global uncertainties.

Discontinuation of Plan-Non plan classification

Plan and Non-Plan classifications of Government expenditure were discontinued in Budget FY18. The reform put greater emphasis on Revenue and Capital classification of Government expenditure. There was a conception built over the years that Plan expenditures were good while Non-Plan ones were not, which resulted in skewed budget allocations, the Economic Survey noted.

Merger of railway Budget with the main Budget

In FY18, the railway budget was merged with the Union Budget for a holistic view of the government's financial position. The initiative looked to facilitate multimodal
transport planning between railways, highways, and inland waterways. Gatishakti has reportedly strengthened this in subsequent years.

It also helped enhance resources for both the Railways and the Union Government. The merger exempts Railways from paying dividends to Government Revenues, while the survey claims the Finance Ministry gets more breathing room for resource allocation in the mid-year review. It also allowed the Ministry of Finance to ensure there is a coherent emphasis on Capex across sectors in recent times.

Shifting the date of the Budget to February 1

From Budget FY18, the date of the Budget was moved to February 1. Advancing it by a month paved the way to complete the Budget cycle. Ministries can also now plan better and execute schemes from the start of the financial year.