Budget 2024: On February 1, Finance Minister Nirmala Sitharaman will unveil the Interim Budget 2024. As the finance minister, this will be her sixth budget presentation. Since this is the final budget of the current Lok Sabha, all eyes are on the finance minister. For those who are unaware, this is really an interim budget; the final union budget will be unveiled following the general elections in 2024, which will elect a new administration.

As the 2024 Budget presentation approaches, below is a summary of the fundamentals of the budget:

Budget 2024: Getting Ready

The budget is a financial statement that provides a detailed breakdown of the government's anticipated revenues and outlays for the upcoming year as well as an assessment of the current fiscal year. The budget is typically created in the third quarter of the fiscal year, months in advance of the presentation on February 1.

The process starts with preliminary estimates of planned and unplanned expenses from different ministries. The Planning Commission is then consulted over this, and they make decisions regarding resource allocation as well as new programmes that can be started using the estimates.

Following the completion of the cost estimate, the anticipated revenue inflows into the treasury are evaluated. Following the estimates of expenditure and revenue, they are matched to determine the estimated projected shortfall in revenue. Next, the amount of borrowing needed to cover the gap is examined.

Post the determination of the fiscal deficit and budget deficit targets, any remaining gap is covered by changes to taxes, spending, and other factors.  On February 1st, the budget is then presented and approved by the Parliament.

Union Budget vs. Interim Budget in Budget 2024

An interim budget is a short-term financial plan that is presented prior to the general elections that will usher in a new government. It can be viewed as a temporary solution to cover government expenses until a new government takes office and creates a new, complete budget.

The Union Budget for the entire fiscal year is a detailed financial plan that addresses every facet of government expenditures, revenue collection, policy changes, and more.

Funds are allotted for ongoing projects, pressing needs, and necessary government activities through an interim budget. It does not include policy reforms because it is not a budget for the entire year. There is also less discussion and scrutiny of the interim budget in the parliament. Solely authorization for essential expenses should be requested until the incoming administration submits a thorough budget. 

The Union Budget is subject to a rigorous scrutiny and debate in the Parliament, accounts for all income and expenses, and proposes new policies, plans, and reforms targeted at social and economic advancement.