The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Tamojit Ganguly, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur
Think tank of Indian government is planning yet another radical change in its structural framework and it’s working on a sector-based medium-term planning framework. It may replace the Five-Year Plan system with a medium-term fiscal framework that will project revenue and expenditure allocations for the next three years beginning 2017-18.
The current financial year, 2016-17, is the last year of the 12th five-year plan. With the Planning Commission scrapped, the process for formulating a 13th five-year plan government has not been initiated, as a consequence of which the era of five-year plans is set to end in India this year.
Experts feel that while medium-term growth is dependent on past performance, long-term growth, on the other hand, can only be enhanced by structural reforms and improving the productive capacity of the economy.
For the new format, the primary units of appropriation at both central and state levels are being revisited to create a clear distinction between revenue and capital items of expenditure so that accounts can be prepared in a bottoms-up manner.