Indian Variant of MTEF: The Scope and Opportunities to Develop an Effective Budget Planning Process

Pratap Jena ()

Working Papers from National Institute of Public Finance and Policy

Abstract: The paper examines the medium-term fiscal policy (MTFP) and a more conventional medium-term expenditure framework (MTEF) adopted in India under the provisions of the fiscal rules. The MTFP and the MTEF, professed to improve fiscal discipline in the context of fiscal rules, did not promote a multi-year budget planning process. The abolition of the five-year development planning process and the subsequent decision to remove plan and non-plan classification from budget classification created a void with regard to the budget planning. This has necessitated developing a revamped fiscal architecture in the form of a medium-term framework to widen the short horizon of the annual budgeting exercise. The paper makes a case for developing structured medium-term budgeting framework (MTBF) building on the existing institutional framework both at the Central and at the subnationallevel and subsequently incorporating performance indicators in sector strategies.

Keywords: Budgeting system : Multi-year Expenditure Framework : Fiscal Rules; Performance Budgeting and Strategic Planning (search for similar items in EconPapers)
JEL-codes: E61 E62 H61 (search for similar items in EconPapers)
Pages: 19
Date: 2017-01
New Economics Papers: this item is included in nep-mac
Note: Working Paper 185, 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:npf:wpaper:17/185

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