Major Expenditure Reforms in India

Prelims & Mains

financial reforms

Major Expenditure Reforms have been undertaken by the Government over the last two-three years.

Major Expenditure Reforms introduced by the government, which  includes simplification of appraisal and approval processes, and also structural changes in the process of budget making itself.

Major Expenditure Reforms in India

The Plan Non-plan distinction is being done away with.

The cost-centres would henceforth be treated in an integrated manner, within only the statutory revenue capital framework.

The integration of Railway Budget with the main budget,

Advancement of the date of presentation of the budget to ensure the entire Budget is passed before the start of the new financial year, are the other significant steps in this direction.

The public schemes and projects under a monitorable Output-Outcome framework. Hitherto, only the financial outlays of schemes of the Ministries were indicated in the Budget document, while the expected outputs and outcomes of the schemes were prepared and presented separately by each Ministry.

From 2017-2018  Budget onwards, the Outlays, Outputs and Outcomes would be presented to the Parliament in measurable terms, bringing-in greater accountability for the agencies involved in the execution of government schemes and projects.

  • Outlay’ is the amount that is provided for a given scheme or project in the Budget;
  • Output’ refers to the direct and measurable product of program activities, often expressed in physical terms or units.
  • Outcomes’ are the collective results or qualitative improvements brought about in the delivery of these services, often expressed in terms of improvements over ex-ante or earlier indicators and benchmarks.

From the year 2017-18 onwards, it has been decided that the output and outcomes of the schemes of 68 Ministries and Departments will be available along with the financial outlays as a part of the Budget documents, so that clearly defined objectives and goals for each scheme can be seen by all.

Related Topics  Aeolus

The present budget, therefore, makes a significant departure from the past and presents

(a) The financial outlay for the year 2017-18 along with

(b) The output and deliverables and

(c) The projected medium term outcomes for each Scheme/Project in a single, consolidated document.

This will significantly enhance transparency, predictability and ease of understanding of  the Government’s development agenda.

Through this exercise, the Government aims to nurture an open, accountable, pro-active and purposeful style of governance by transitioning from mere outlays to result oriented outputs and outcomes.

This effort will enable Ministries to keep track of the scheme objectives and work towards the development goals set by them. The document has been prepared through painstaking efforts by the NITI Aayog, in consultation with the implementing Ministries and Departments. Since this is the first such exercise, the document may have certain shortcomings.

It will be our endeavor to improve, with each passing year, and provide more information and greater transparency in our efforts towards achieving the National Development Agenda.


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