Mumbai: BJP’s big loss in three states has Maha impact on the budget plan

Vote-on-account budget is an interim budget where the government plans the expenditure for a few months until the complete budget session
Maharashtra chief minister Devendra Fadnavis.(HT PHOTO)
Maharashtra chief minister Devendra Fadnavis.(HT PHOTO)
Updated on Jan 17, 2019 01:10 AM IST
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Hindustan Times | By, Mumbai

The defeat in the Assembly elections in Madhya Pradesh, Rajasthan and Chhattisgarh has led the state to change its plans of presenting a full budget for 2019-2020 in February this year. Instead, the government plans to go for an interim or vote-on-account budget for four months.

Vote-on-account budget is an interim budget where the government plans the expenditure for a few months until the complete budget session. Consequently, instead of the earlier plan of a four- to six-week budget session, the state will now wrap up the session beginning February 25 in five days.

Officials from the finance department said the government had initially planned a full-fledged budget along with the parliamentary affairs department, giving the traditional system of interim budget in the Lok Sabha election year a miss.

They were not keen on waiting for the Union budget, which is likely to be presented in June-July after the elections.

“With the increase in devolution of funds from the Central taxes by 10%, the states have got more powers to design spending on its schemes. It has reduced the dependency on Central schemes. It was assumed that the Modi government would return to power after the Lok Sabha elections, and there would be no major changes in Central allocation. So we had planned a full budget,” said a senior official from the Parliamentary Affairs department.

“However, the results in the three states changed political dynamics. Both the departments, which were preparing for the full budget, were told to put the plan on hold the day the results were announced [December 11],” said another official from the department.

The state cabinet soon reduced the period of the session and deferred it by a week. “It had to begin on February 18 and go on for at least four to six weeks. It will now be held for five days and the vote-on-account will be on February 27. Earlier, the state was confident that there would be no change in its schemes and the allocation for them under the directives of the Finance Commission. In that scenario, presenting the full budget was possible,” an official from the finance department said.

He said the government can announce a full budget in June or July ahead of the state Assembly polls.

“Had it presented a full budget and announced populist schemes in February, its impact would have faded until the Assembly elections. The government now can use the budget in June or July for such announcements. This was another reason for a change in decision,” the official said.

“It is true that we had planned a full budget earlier, but later thought that it would be better to have an interim budget, as it gives us an opportunity to plan the schemes later. It has nothing to do with the results of the three states,” said state finance minister Sudhir Mungantiwar.


    Surendra P Gangan is Senior Assistant Editor with political bureau of Hindustan Times’ Mumbai Edition. He covers state politics and Maharashtra government’s administrative stories. Reports on the developments in finances, agriculture, social sectors among others.

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