India’s Union Budget 2024-25: A Detailed Process
The process of compiling and presenting India’s budget document is a detailed and extensive procedure. While the Finance Minister will present the Union Budget 2024 in the Parliament on February 1, the preparations for the document began in H2 2023.
The budget file contains 14 crucial documents that hold the Annual Finance Statement, Demand for Grants, and the Finance Bill. These documents are accompanied by explanatory statements.
Preparations start six months in advance
Typically, by August or September of the previous year, a Budget Circular is released by the Ministry of Finance. This marks the beginning of data collection and preparation for the upcoming fiscal year. Meanwhile, ministries commence compiling reports on their present fiscal expenditures and outline plans for the upcoming year, specifying details about schemes, programs, and expenditures.
This follows several meetings between ministries and departments of Expenditure and Economic Affairs, to arrive at preliminary estimates for various expenses. At this stage, Niti Ayog is actively involved in reviewing their expected expenditures.
Advisors re-evaluate budget document
The Finance Ministry also plans and assesses expected revenue flow, considering sources like income tax, GST, and dividends from state-owned enterprises. Secretaries and official advisors then reevaluate the information after comparing current and previous-year estimates. Meanwhile, the Finance Ministry sets deficit targets and borrowing amounts.
Budget 2024: Cabinet, President give nod
The final budget draft goes to the Union Cabinet for approval. The President assesses the document before the Finance Minister reads it in the Lok Sabha. The Finance Minister’s speech is divided into two parts that include the economy and tax announcements. This concludes the complex and thorough process that will determine the economic course of the country.
However, given that 2024 is an election year, the Finance Minister is set to present an interim budget. The full budget is typically presented by the new government once it takes office.
Hot Take: India’s Budget Process: A Well-Planned Endeavor
The process of preparing and presenting India’s Union Budget is a well-planned and extensive endeavor. Starting six months in advance, various ministries and departments collaborate to collect data, evaluate expenses, and plan for the upcoming fiscal year. Advisors re-evaluate the budget document, considering revenue sources and setting deficit targets. The final draft undergoes approval from the Union Cabinet and assessment by the President before being presented by the Finance Minister. This meticulous process determines the economic course of the country. In an election year like 2024, an interim budget will be presented, with the full budget expected to follow after a new government takes office.
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