The economy is projected to contract by a massive 10.3 per cent this year, according to an IMF forecast. Even the Reserve Bank of India expects the economy to shrink by 9.5 per cent in the current financial year.
As per the finance ministry schedule, the nearly one-month long exercise to finalise the Revised Estimate (RE) for 2020-21 and Budget Estimate (BE) for 2021-22 began on Friday. The meetings will conclude on November 12.
Officials of the Department of Financial Services, as well as ministries of MSMEs, housing, steel and power were among those who participated in the first meeting, as per the schedule.
“This year, however, keeping in view the COVID-19 situation and the need to maintain social distancing, the number of participants for the pre-budget meetings may be restricted to a maximum of 5 officers (for each meeting) from a Ministry/Department, not below the rank of Director/DS,” the Budget Division of the finance ministry had said in a notice.
It will be the third Budget of the Modi 2.0 government and Finance Minister Nirmala Sitharaman.
Budget 2021-22 is likely to be presented on February 1.
The Prime Minister Narendra Modi-led government scrapped the colonial-era tradition of presenting the Budget at the end of February. The then finance minister Arun Jaitley had for the first time presented the annual accounts on February 1, 2017.
With the preponement of the Budget, ministries are now allocated their budgeted funds from the start of the financial year beginning April. This gives government departments more leeway to spend as well as allow companies time to adapt to business and taxation plans.
Previously, when the Budget was presented at the end of February, the three-stage Parliament approval process used to get completed some time in mid-May, weeks ahead of onset of monsoon rains.
This meant government departments would start spending on projects only from August-end or September, after the monsoon season ended.