Budget documents to provide 'composite' outflow on schemes

The Budget documents will have a different look this time with the Finance Ministry deciding to introduce the concept of 'composite outflow' of funds on government schemes by doing away with 'plan and non-plan' distinction.
Different ministries and departments as well as the state governments have already been provided with the 'Guidance note on Plan and non-Plan merger' for classification on public expenditure.
The Budget documents for 2017-18 fiscal, to be tabled by Finance Minister Arun Jaitley in the Lok Sabha on February 1, is being prepared in the light of new classification.
The Modi government has already replaced the erstwhile Planning Commission with Niti Aayog, thus giving a new focus to boost economic development.

With the removal of the distinction, the expenditure figures in the Part B of the Expenditure Budget document will reflect the 'composite' position of public outflow in four categories -- General, Social, Economic and others.
According to sources, the government has decided to merge plan and non-plan expenditure in the budgetary classification to ensure that adequate funds are made available for running and maintenance of capital structures created under the government schemes.

Currently, much of the focus is on plan expenditure and often non-plan expenditure which used for maintenance and functioning of the schemes is neglected.
"The impression that more plan expenditure means more development and well-being for the public has turned out to be a misplaced assumption, in practice," the sources said.

Due to the insufficient provision for maintenance, the assets created out of plan expenditure deteriorate because it is considered to be non-development expenditure, they added.
Citing an example, sources said schools are constructed under plan expenditure, while maintenance of schools and salary of teachers come under non-plan.