Monday, March 9, 2015

Finance Ministry

Ministry of Finance (MoF)
Finance Ministry is one of the most important ministries of Government of India. It governs the following -
  • Taxation (direct and indirect - CBDT and CBEC comes under this ministry)
  • Financial Institutions (Banks, NBFCs, etc.)
  • Capital Markets (SEBI, etc)
  • Financial Legislation (Money Bills, etc.)
  • Center and State finances
  • General Budget (presented by Finance Minister)

Departments of MoF
Ministry of Finance of India comprises 5 departments -

1.  Economic Affairs
Department of Economic Affairs (DEA) formulates and monitors the economic policies and programmes of the government. It performs the following functions -
  • General Budget (excluding Railway Budget) preparation
  • Formulation of macroeconomic policies - fiscal policy, inflation, public debt management, capital market regulation, stock exchange, etc.
  • Deals with external resources through Bilateral and Multilateral cooperation with foreign countries, foreign investments, forex, balance of payments (BOP), etc.
  • Indian currency production (bank notes and coins), postal stamps, cadre management, etc.
Economic Affairs Secretary - Shri Rajiv Mehrishi

2.  Expenditure
Department of Expenditure governs the public financial management system in the Central government. It performs the following functions -
  • Appraises major schemes or projects before sanction (both Plan and non-Plan expenditure)
  • Center to State financial resources transfer
  • Implementation of Central Pay Commission (currently 7th Pay Commission chaired by Justice Ashok Kumar Mathur) and Finance Commission (currently 14th Finance Commission chaired by Dr. Y.V.Reddy) recommendations.
  • Expenditure management of Central Ministries or Departments, etc.
Expenditure Secretary - Shri Ratan P.Watal  

3.  Revenue
Department of Revenue controls all the Direct and Indirect Taxes by Central Board of Direct Taxes (CBDT) and Central Board of Excise and Customs (CBEC) respectively.
Note that Income Tax, Customs Duty, Excise Duty, etc. - all type of taxes are governed by Revenue Department.

Revenue Secretary - Shri Shaktikanta Das

4.  Financial Services
Department of Financial Services (DFS) governs all banks, insurance, pension and financial services (including MSMEs) provided by government agencies or private corporations.

Financial Services Secretary - Shri Hasmukh Adhia

5.  Disinvestment
Department of Disinvestment is responsible for making policy regarding disinvestment and privatization of Public Sector Units (PSU) of government of India.

Disinvestment Secretary - Smt. Aradhana Johri

Cadres of MoF
The following cadres of Indian Civil Services work under Ministry of Finance -
  • Indian Economic Service (IES)
  • Indian Revenue Service (IRS)
  • Indian Cost Accounts Service
  • Indian Civil Accounts Service

Finance Minister
First Finance Minister of independent India is Shri R.K.Shanmukham Chetty and current Finance Minister is Shri Arun Jaitley.

Minister of State for Finance
Current Minister of State for Finance is Shri Jayant Sinha

Finance Secretary
Finance Secretary plays the leadership role among the 5 departmental secretaries (chosen among them). Generally Finance Secretary tends to be the senior most of the 5 (seniority based on entry into civil services, not based on actual age).

Current Finance Secretary is Economic Affairs Secretary - Shri Rajiv Mehrishi

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