The Union Budget for 2022-23 will be presented in the Lok Sabha by finance minister Nirmala Sitharaman on February 1. The 256th budget session will commence on January 31, just two weeks before the elections to five states — Goa, Uttarakhand, Manipur, Punjab and Uttar Pradesh.
While the first half will run from January 31 to February 11, the second half will be from March 14 to April 8. The budget will be presented in the lower house of the Parliament before being tabled in the Rajya Sabha.
Ahead of the budget presentation, News18.com answers your questions about the crucial document.
What is a Budget?
Article 112 of the Indian Constitution deals with the annual financial statement. According to Article 112, a statement of estimated receipts and expenditure of the Government of India has to be laid before the Parliament in respect of every financial year which runs from April 1 to March 31. This statement titled “Annual Financial Statement” is the main Budget document.
The Annual Financial Statement shows the receipts and payments of Government of India under the three parts in which accounts are kept — Consolidated Fund, Contingency Fund and Public Account.
The Union Budget is classified into two types: revenue and capital. Revenue Budget deals with the revenue receipts of government (tax revenues and other revenues) and the expenditure met from these revenues. Revenue expenditure is for the normal running of public departments and various services, interest charges on debt incurred by the government, subsidies, etc. Basically, it accounts for the expenditure that does not result in creation of assets.
Capital Budget, on the other hand, consists of capital receipts and payments. The main items of capital receipts are loans raised by the Government of India from public and other parties.
Who makes the Budget?
The budget is prepared by the ministry of finance after consultations with all the other ministries with respect to their funding requirements. On the Budget Day, the annual financial statement is presented in Lok Sabha by the finance minister. While the presentation part of the process is shortest, it takes several months to shape the budget.
Besides states, the finance ministry consults the NITI Aayog and spending ministries. All ministries are have to present their demands based on spending guidelines of the Finance Ministry. The Budget Division of the Department of Economic Affairs in the finance ministry is the nodal body responsible for producing the Budget.
Since 2017, the Union Budget is being presented on February 1, which allows it to get passed by Parliament before March 31 itself.
How is the Budget Made?
The Budget Division issues a circular to all Union ministries, states, UTs, autonomous bodies, departments and the defence forces to prepare their estimates for the next financial year. As estimates come in, extensive consultations are held between Union ministries and the Department of Expenditure of the finance ministry.
Meanwhile, the Department of Economic Affairs and Department of Revenue meets all stakeholders such as farmers, businessmen, FIIs, economists and civil society groups to take their views. Once these pre-Budget meetings are over, a final call on the tax proposals is taken by the Union Finance Minister.
Before the Union Budget is frozen, the proposals are discussed with the Prime Minister.
How is the Budget Presented?
Before presenting the budget, the finance minister briefs the cabinet through a ‘summary for the cabinet’.
The finance minister presents the budget in the Lok Sabha, reading out a ‘Budget Speech’ on that day in the Lok Sabha. The Budget Speech outlines the salient points of the entire Budget, its key estimates and proposals that may run into several thousand pages.
The budget is tabled in the Parliament after the minister’s speech and a copy of the Budget tabled in the Rajya Sabha soon after its presentation in the Lok Sabha.
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