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

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  • Pratap Ranjan Jena

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 subnational level and subsequently incorporating performance indicators in sector strategies. [NIPFP Working Paper No. 185].

Suggested Citation

  • Pratap Ranjan Jena, 2017. "Indian Variant of MTEF: The Scope and Opportunities to Develop an Effective Budget Planning Process," Working Papers id:11564, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:11564
    Note: Institutional Papers
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    References listed on IDEAS

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    1. James Brumby & Richard Hemming, 2013. "Medium-Term Expenditure Frameworks," Palgrave Macmillan Books, in: Richard Allen & Richard Hemming & Barry H. Potter (ed.), The International Handbook of Public Financial Management, chapter 10, pages 219-236, Palgrave Macmillan.
    2. Cutt, James, 1972. "Programme Budgeting in Developing Countries: Its Application and Relevance in the Context of National Planning," Public Finance = Finances publiques, , vol. 27(3), pages 292-311.
    3. Pratap R Jena & Satadru Sikdar, 2016. "Search for Resources in a High Income State: A Study of State Finances of Sikkim," Working Papers id:10798, eSocialSciences.
    4. Rao, Govinda & Shah, Anwar, 2009. "States' Fiscal Management and Regional Equity: An Overview," OUP Catalogue, Oxford University Press, number 9780195698794.
    5. John Toye, 1981. "Public Expenditure Reforms in India and Malaysia," Development and Change, International Institute of Social Studies, vol. 12(1), pages 121-144, January.
    6. Allen Schick, 2010. "Post-Crisis Fiscal Rules: Stabilising Public Finance while Responding to Economic Aftershocks," OECD Journal on Budgeting, OECD Publishing, vol. 10(2), pages 1-18.
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    Cited by:

    1. Bhabesh Hazarika & Pratap Ranjan Jena, 2017. "Public Procurement in India: Assessment of Institutional Mechanism, Challenges, and Reforms," Working Papers id:12004, eSocialSciences.

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