Government Plan Programme Policies for UPSC Exam

:: Changes in Budget Making ::

Budget is a socio economic document which is gien under Art 112 of Constitution. The budget is prepared by the budget division in department of economic affairs, Ministry of Finance. Budget making itself is not a one day issue, it passes through various stages. In total Budget goes through following processes. First to come up is Formulation of Budget, then budget would be approved by the legislature, finally the execution and auditing of the Budget ammount takes place. Process of budget making itself takes more than six months. The five year plans are referred to discuss the gross budgetary support from the union government to support the annual plans. The real test of the budget maker is to pass the legislation which fiscally disciplines the government. The fiscal responsibility and Budget management (FRBM) act sets the target of keeping the revenue deficit nil and fiscal deficit below 3%. The process of budget takes final shape in around month of January when the revenue. By convention the union budget is presented on the last day of February in the Lok Sabha. The budget is tabled at the Rajya Sabha only after the finance minister completes its speech in the Lok Sabha. A broad discussion takes place at this stage without any voting. Then the house is adjourned.

The Union Cabinet has approved the proposals of Ministry of Finance on certain landmark budgetary reforms relating to (i) the merger of Railway budget with the General budget, (ii) the advancement of the date of Budget presentation from the last day of February and (iii) the merger of the Plan and the Non-Plan classification in the Budget and Accounts. All these changes will be put into effect simultaneously from the Budget 2017-18.
The arrangements for merger of Railway budget with the General budget have been approved by the Cabinet with the following administrative and financial arrangements-

1. The Railways will continue to maintain its distinct entity -as a departmentally run commercial undertaking as at present;
2. Railways will retain their functional autonomy and delegation of financial powers etc. as per the existing guidelines;
3. The existing financial arrangements will continue wherein Railways will meet all their revenue expenditure, including ordinary working expenses, pay and allowances and pensions etc. from their revenue receipts;
4. The Capital at charge of the Railways estimated at Rs.2.27 lakh crore on which annual dividend is paid by the Railways will be wiped off.
5. Consequently, there will be no dividend liability for Railways from 2017-18 and Ministry of Railways will get Gross Budgetary support.
6. This will also save Railways from the liability of payment of approximately Rs.9,700 crore annual dividend to the Government of India;

The presentation of separate Railway budget started in the year 1924, and has continued after independence as a convention rather than under Constitutional provisions.

Important Topics for UPSC 2017 Exams​ (Anti-Dumping Duty)

What?

A penalty is imposed on questionably low-priced imports, to escalate their price in the importing country and therefore to protect domestic industry from unfair competition.

Why?

• Because, to rectify the trade distortion effect of dumping and re-establish fair trade.
• WTO under the GATT (General Agreement on Tariff and Trade) allow their member countries to take specific decision on imposing such anti-dumping duty to ensure fair trade rather than protecting domestic industry.

Example:

Steel sector in India was facing severe loss for past 3-4 years due to very low price imports from china. Prices of steel plummeted in the international market due to lower demand and excess capacity of Chinese steel manufacturers. Scenario was such bad that many steel companies across the globe including India were facing huge economic loss and even some defaulting cases in India.

Further, reason for such a low steel prices was found out to be over subsidised production in china. Therefore to counter such predatory pricing many countries including India has adopted the Anti-dumping duty therefore raising the cost of import and therefore the final prices. The result of which seems effective from the recent quarter results of steel companies where most of them either government controlled (SAIL) or public limited companies (Tata Steel, Jindal etc.) have shown huge profits and reversal of economic activity.