Ministry of Finance - 10 Mints Seminar Notes

Ministry of Finance - 10 Mints Seminar Notes

Definition:

•    The Ministry of Finance is a ministry within the Government of India concerned with the economy of India, serving as the Indian Treasury Department.

•    In particular, it concerns itself with taxation, financial legislation, financial institutions, capital markets, centre and state finances, and the Union Budget. It is the apex controlling authority of the Indian Revenue Service, Indian Economic Service, Indian Cost Accounts Service and Indian Civil Accounts Service.

R. K. Shanmukham Chetty was the first Finance Minister of independent India. He presented the first budget of independent India on 26 November 1947.

Current Financial Minister is Nirmala Sitharaman

 

Organisational Structure:

•    Department of Economic Affairs

•    Department of Expenditure

•    Department of Revenue

•    Department of Financial Services

•    Department of Investment and Public Asset Management

Department of Economic Affairs:

•    The Department of Economic Affairs is the nodal agency of the Union Government to formulate and monitor country's economic policies and programmes having a bearing on domestic and international aspects of economic management. A principal responsibility of this Department is the preparation and presentation of the Union Budget to the parliament and budget for the state Governments under President's Rule and union territory administrations. Other main functions include:

•    Formulation and monitoring of macroeconomic policies, including issues relating to fiscal policy and public finance, inflation, public debt management and the functioning of Capital Market including Stock Exchanges. In this context, it looks at ways and means to raise internal resources through taxation, market borrowings and mobilisation of small savings

•    Monitoring and raising of external resources through multilateral and bilateral Official Development Assistance, sovereign borrowings abroad, foreign investments and monitoring foreign exchange resources including balance of payments

•    Production of bank notes and coins of various denominations, postal stationery, postal stamps; and Cadre management, career planning and training of the Indian Economic Service (IES).

Shri Tarun Bajaj is the current secretary of this department.

Department of Expenditure:

•    The Department of Expenditure is the nodal Department for overseeing the public financial management system (PFMS) in the Central Government and matters connected with the finances. The principal activities of the Department include a pre-sanction appraisal of major schemes/projects (both Plan and non-Plan expenditure), handling the bulk of the Central budgetary resources transferred to States, implementation of the recommendations of the Finance and Central Pay Commissions, overseeing the expenditure management in the Central Ministries/Departments through the interface with the Financial Advisors and the administration of the Financial Rules / Regulations /Orders through monitoring of Audit comments/observations, preparation of Central Government Accounts, managing the financial aspects of personnel management in the Central Government, assisting Central Ministries/Departments in controlling the costs and prices of public services, assisting organizational re-engineering thorough review of staffing patterns and O&M studies and reviewing systems and procedures to optimize outputs and outcomes of public expenditure.

•    The business allocated to the Department of Expenditure is carried out through its Establishment Division, Plan Finance I and II Divisions, Finance Commission Division, Staff Inspection Unit, Cost Accounts Branch, Controller General of Accounts, and the Central Pension Accounting.

Dr. T. V. Somanathan is the current secretary of this department.

Department of Revenue:

•    The Department of Revenue functions under the overall direction and control of the Secretary (Revenue). It exercises control in respect of matters relating to all the Direct and Indirect Union Taxes through two statutory Boards namely, the Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC). 

•    Each Board is headed by a Chairman who is also ex officio Special Secretary to the Government of India (Secretary level). Matters relating to the levy and collection of all Direct taxes are looked after by the CBDT whereas those relating to levy and collection of Customs and Central Excise duties and other Indirect taxes fall within the purview of the CBIC. 

•    The two Boards were constituted under the Central Board of Revenue Act, 1963. At present, the CBDT has six Members and the CBIC has five Members. The Members are also ex officio Secretaries to the Government of India.

Members of CBDT are as follows:

1.    Member (Income Tax)

2.    Member (Legislation and Computerisation)

3.    Member (Revenue)

4.    Member (Personnel & Vigilance)

5.    Member (Investigation)

6.    Member (Audit & Judicial)

Ajay Bhushan Pandey is the current secretary of this department.

Department of Financial Services:

•    The Department of Financial Services covers Banks, Insurance, and Financial Services provided by various government agencies and private corporations. It also covers pension reforms and Industrial Finance and Micro, Small and Medium Enterprise. It started the Pradhan Mantri Jan Dhan Yojana.

•    PFRDA, Pension Fund Regulatory and Development Authority (PFRDA) is a statutory body which also works under this department.

•    Shri Debasish Panda is the current secretary of this department.

Department of Investment and Public Asset Management:

•    The Department of Disinvestment has been renamed as Department of Investment and Public Asset Management or 'DIPAM', a decision aimed at the proper management of Centre's investments in equity including its disinvestment in central public sector undertakings. 

•    Finance Minister Arun Jaitley had announced the renaming of the Department of Disinvestment in his budget speech for 2016-17. Initially set up as an independent ministry (The Ministry of Disinvestment) in December 1999, the Department of Disinvestments came into existence in May 2004 when the ministry was turned into a department of the Ministry of Finance. 

•    The department took up all the functions of the erstwhile ministry which broadly was responsible for a systematic policy approach to disinvestment and privatisation of Public Sector Units (PSUs).

•    Tuhin Kanta Pandey is the current secretary of this department.

 

Union Budget 2021-22 Key points:

The major announcements made by the Finance Minister under this union budget are mentioned below

Health and Wellbeing: 

•    The FM announced an increase in the spending with an expense of Rs.64 thousand crores that shall be spread over 6 years as part of a new scheme partnered with the National Health Mission. 

•    This has been done to provide aid to the urban and rural healthcare facilities.

Jal Jeevan Mission: 

•    The Finance Minister also declared a new scheme as Jal Jeevan Mission that possessed Rs.2.87 lakh crores as an outlay. 

•    The new mission is targeted to sustain and improve the water supply in urban areas and local bodies as well as ensure proper supply to all the tap connections.

Urban Swachh Bharat 2.0: 

•    The Finance Minister also announced Rs.1.41 lakh crores to be given for Urban Swachh Bharat 2.0 to be used over 5 years. 

Physical capital:

•    The Finance Minister reinstated Rs.1.47 lakh crores for 5 years to fulfill the improvement of wastewater treatment and management of water pollution due to plastic wastes.

Scrapping Policy: 

•    One of the innovative policies introduced under the Union Budget 2021 was the scrapping policy that has the objective of reducing vehicular pollution.

Finance Minister also stated that around Rs.35000 crore shall be allotted for the production and distribution of COVID-19 vaccines.

Infrastructure: 

•    Under the current budget an amount of Rs.1.97 lakh crores has been announced oriented towards manufacture on a global scale and also to grow employment opportunities for the youth. 

•    The budget also integrated the development of 7 high-end textile parks across the country over the next 3 years.

Financial Capital: 

•    For boosting the financial capital of the country the Finance Minister announced the establishment of a Financial Institution and has declared Rs.5 crores as development amount. 

•    The Minister also announced an amount of Rs.2 lakh crore as state capital expenditure.

•    The total capital expenditure for the financial year 2021-22 has been stated to be Rs.5.54 lakh crore and the Year-on-Year growth rate has been estimated at around 34.5% by the finance minister.

•    Union Budget also announced the allowance for National Highways for the following states: 

a) Kerala: RS.65,000 crores, 

b) Tamil Nadu: Rs.1.03 lakh crores, and 

c) West Bengal: Rs.25,000 crores 

 

Inclusive development of Aspirational India: 

•    Under this pillar of the Union Budget, the Finance Minister announced a reform in the agricultural sector allowing a 1.5 times greater MSP than the last budget. 

•    The agricultural credit has also been increased now to Rs.16.5 crore.

                                                                                                                 

 

 

Presented By,

 

 

 

 

 

 

 

 

 

 

Gayathry S P

Banking

Magme School of Banking