How is the Union Budget prepared

How is the Union Budget prepared?

The budget contains a list of financial proposals and creating it is no mean feat. Just like Rome was not built in a day, the Union Budget of India is not created in a few days. It takes months and months of planning, consulting and compiling to create the final draft of the budget. Let’s understand the efforts undertaken by the different branches of the Government in making the Union Budget –

The role of ministries

The Budget Division of the Department of Economic Affairs in the Ministry of Finance has the responsibility to create the Union Budget. However, the task is not done alone. A lot of Government ministries are involved in the process. The Finance Ministry issues budget-related circulars to –

States and Union Territories
Union Ministries
Defence forces
Government departments, and
Autonomous bodies

They are required to prepare financial estimates of their respective spending and revenue in the coming year. Moreover, the revised estimates of the last year are also required.

Round of consultations

Before the Finance Ministry makes financial estimates for different departments of the Government, the Department of Expenditure holds extensive consultations with the Union Ministries. These consultations are done to estimate the revenue and expenditure of each department and the funds that would be needed in the coming year. The consultations also help the Finance Ministry understand the financial position of the Government as a whole.

Inputs from cabinet departments

The Department of Revenue and the Department of Economic Affairs also meet with their respective stakeholders to assess their financial position. The inputs from such meetings are also conveyed to the Finance Ministry.

PM’s approval

After the Finance Ministry completes its consultations and all financial inputs are received, the Finance Minister makes decisions about changes in tax regulations. Such proposals are discussed with the Prime Minister. After getting the PM’s approval, the final draft of the budget is made and it is sent for printing.

The Lok Sabha Secretariat’s Secretary General seeks the approval from the President for presenting the budget. After the budget is presented in the Lok Sabha, the cabinet is briefed about the budget proposals and then the budget is tabled in the Parliament.

The budget proceedings start from September so that they can be completed by January 22 when the budget is sent for printing. Creating a budget is, therefore, a mammoth task, one that requires the efforts of many.