Rationale of this move

1. The Finance Bill, incorporating the budget proposals, could be passed well before the starting of fiscal year. Therefore, the government departments, agencies would know their allocation right from April 1, the onset of financial year.

2. It would also help the private sector to anticipate government procurement trends and evolve their business plans.

3. In the earlier scheme of things, the Lok Sabha passed Vote on Account for April-June quarter, under which departments are provided with a sixth of their total allocation for the year. Advancing the budget enables the government to do away with this practice.

4. The investment in infrastructural projects largely takes place in later part of the year, because budget gets passed only by June, but by then monsoon sets in making it difficult to start infrastructural project. As a result, the effective investment period is quite short, thereby ending in ‘March Rush’. This causes inefficiency in resource utilization and delays in project implementation.