How the Finance Minister Prepares the Budget?

Muskan Dixit | Ground Report | Budget is an annual financial statement which encloses the estimated earnings from revenue and estimated expenditure of the government during a particular fiscal year. It establishes a financial roadmap for the country in the ensuing financial year.

Every year  the Department of Economic Affairs in the Ministry of  Finance prepares the Union Budget which is presented by the Finance Minister.

The Budget is prepared through a consultative process involving the Ministry of Finance,  NITI Ayog and other concerned ministries.

What is the Budget?

The budget is an economic plan that focuses on the entity’s financial and human resources on the accomplishment of specific goals and objectives established by the policy makers. On Budget Day, the annual financial statement is presented in the Lok Sabha( Lower House) by the Finance Minister. 

The finance ministry’s Economic Department issuses the ABC (Actual Budget Circular) to all ministries through which ministry present their demands based on the guidelines as 

• Budget estimate (Revenue and expenditure for year)
• Revised estimate (last year revenue and expenditure) 
• Actuals (facts and figure)

The Union Budget is being presented on February1, which allows it to be passed by the parliament before March31.

How is the Budget  prepared?

The Budget begins to be prepared in August-september, around six months prior to the presentation of the budget.

The Finance Ministry sends Budget Circulars containing ABC to the concerned ministries and the departments.These circulars are distributed among the lay out officers and the field officers. 

Meanwhile, the Department of Economics Affairs and Department of Revenue meet all the leaders and stakeholders from across sectors such as industries, the financial sector, agriculture and the social sector to take their inputs and suggestions into the Budget-making exercise. Apart from holding internal discussion on various key numbers of the Budget such as Gross Domestic Product (GDP), projected fiscal deficit, the revenue and expenditure accounts to put their inputs and suggestions in preparing the budget.

Composing  the Budget

Analyzing all the aspects sincerely, the finance Ministry then allocates revenues to various administrative ministries  and devises new public welfare schemes. After the consultation  done from the Union Cabinet or the Prime Minister. The estimate is generated.

Printing of the Budget 

The printing process of the Union Budget starts with the ritual of the “HALWA CEREMONY.” During the process, all the officials and the staff involved in Budget- making get confined to the premises of the ministry, isolated from any contact with the outside world.

How is the Budget presented?

The Finance Minister presents the budget in the Lok Sabha on “Budget Day”. The key estimate and proposals of the entire budget are presented. The budget is presented in the parliament after the minister’s speech and a copy of the budget tabled in the Rajya Sabha (Upper House) soon after it is presented in the Lok Sabha.