On February 1, India's FM Sitharaman and the BJP-led government are scheduled to unveil the final union budget before the country's April–May 2024 Lok Sabha elections. And even though this budget is temporary, planning has gotten underway, as it does every year. But have you ever pondered how the entire process of creating a budget is carried out? Which steps are the first and last? Continue reading to see how the Finance Ministry prepares the national union budget by breaking down the process into manageable steps.
Here are 5 Step Process when it comes to Union Budget Preparation:
1. Pre-Budget Circulars & Discussions
The process of creating the budget begins around six months before it is presented. Through Budget Circulars, the Finance Ministry gives relevant ministries and departments the required instructions and directions. After receiving these circulars, the disbursing and field officers confer on the department's expenses and revenues for the past and present fiscal years, as well as the financial needs for the next fiscal year.
2. Data Review & Estimates Projection
The data and estimates provided by local officials are carefully examined by senior officials in respective agencies. Once approved or, if necessary, changed, the data and projections are sent to the appropriate ministries for additional evaluation. Finally, the figures and estimates reach the Finance Ministry, where they are carefully reviewed and compared to the current state of the economy and available funding to determine their feasibility.
3. Consultation With The PM Or Cabinet
After careful consideration, the Finance Ministry develops new public welfare initiatives and allocates funds to other administrative ministries.
The Union Cabinet or the Prime Minister, whose decision is final, are consulted by the Finance Ministry when disputes emerge regarding the allocation of resources. After the money is set aside for future expenses, the Finance Ministry collaborates with the Central Board of Direct Taxes and the Central Board of Excise and Customs to compile a report on the anticipated revenues to be collected in the forthcoming fiscal year.
These reports are then combined to create the final Union Budget. Throughout this process, the Finance Ministry communicates with public domain stakeholders like farmers and small business owners in order to gather information and ensure an efficient budget.
4. Printing Of Budget After Halwa Ceremony
The commencement of the Union Budget printing process is marked by a tradition called the "halwa ceremony." During this occasion, the Finance Minister shares the halwa, a traditional Indian dessert, with other participating officials and workers. Following the event, printing of the Union Budget begins. All officials and staff members involved in creating the budget are kept isolated to the ministry's grounds during this phase and are not allowed to communicate with the outside world, as they have exclusive access to it prior to its presentation to Parliament.
5. Budget Presented By Finance Minister
The Finance Minister presents the Union Budget to Parliament. In previous years, the budget has been presented on February 1st.
Budget Is Presented Twice In Election Years
In election years like this one (2024), there are two budget presentations. Firstly an interim budget is presented on February 1st, which shows the govt’s projected spending and revenue for the next few months. Following the election results, the newly elected administration presents the final budget for the remaining fiscal year. It is anticipated to be made available in July.
