A new financial year cycle is unlikely to make its debut from 2017-18 as it would require a number of changes including accounting practices.

However, the government is set to introduce two crucial Budgetary changes from next fiscal — merger of the Railway Budget with the Union Budget and scrapping the expenditure classification of Plan and Non-Plan.

“Work has started on how best to merge the Railway Budget with the Union Budget. Most likely, there will be one consolidated Budget from 2017-18,” said a person familiar with the development.

Transfer of assets

The Railway Ministry, along with the Finance Ministry, is understood to be working on how to transfer railway assets as well as liabilities including debt into the General Budget.

“There are a number of issues, which have to be worked out. A five-member committee of officials in the Finance Ministry is working on it,” said the source.

The proposal was mooted by NITI Aayog member Bibek Debroy recently as part of the restructuring of the Indian Railways.

Discussions are taking place on whether the merger of the Budgets will be completed in one shot or done in phases.

Meanwhile, the Department of Expenditure and the Budget Division in the Finance Ministry are also finalising the modalities of doing away with the expenditure classifications of Plan and Non-Plan, which would be replaced with just spending on Revenue and Capital Account.

Reports awaited

“Typically, this period of August and September are quiet months for the Budget Divisions, which begins work on the next Budget towards the end of September. But this year, work is going on full swing as there are several changes to be introduced,” said another official.

However, the move to a new financial year cycle would not be introduced from 2017-18.

“We are awaiting the Committee’s report, which will be submitted by December 31. It is yet to be seen what its recommendations are…Moreover, there will be no time to introduce the new cycle from January 1, 2017,” reasoned the official.

The Finance Ministry had in July this year set up a committee under Shankar Acharya, a former Chief Economic Adviser to the Finance Ministry, to examine the “desirability and the feasibility of a new financial year”.

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