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

Author

Listed:
  • Jena, Pratap Ranjan

    (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.

Suggested Citation

  • Jena, Pratap Ranjan, 2017. "Indian Variant of MTEF: The Scope and Opportunities to Develop an Effective Budget Planning Process," Working Papers 17/185, National Institute of Public Finance and Policy.
    • Handle: RePEc:npf:wpaper:17/185
    Note: Working Paper 185, 2017
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    References listed on IDEAS

    as
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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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    Keywords

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    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems

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