GR Exclusive: Budget 2024: Ahead Of February 1, A Guide On How The Union Budget Is Prepared

As the date approaches for the budget announcement of the upcoming fiscal year, Union Finance Minister Nirmala Sitharaman is poised to present the Union Budget 2024-25 on February 1. However, with the Lok Sabha elections looming on the horizon, this budget will be an interim one, paving the way for a more comprehensive financial plan after the general elections.

The Union Budget serves as a comprehensive blueprint, encompassing details on the government's anticipated receipts and expenditures for the fiscal year, running from April 1 to March 31 of the following year. The process of preparing the budget involves planning, consultation, and compilation, commencing nearly six months before the financial statement is unveiled in Parliament.

The budget-making journey kicks off with the issuance of circulars by the union finance ministry to all ministries, states, union territories, and autonomous entities. These circulars include skeletal forms and guidelines, guiding these entities in preparing estimates for the upcoming financial year. Each ministry, union territory, and autonomous body is required to disclose their earnings and expenses from the previous year, alongside providing estimates for the upcoming fiscal period.

Once the proposals are submitted, the revenue secretary takes charge of the next step, reviewing these proposals. The Department of Expenditures and Niti Aayog further scrutinize the proposals through extensive consultations. Following verification and approval, the data is then forwarded to the finance ministry.

The finance ministry, armed with the examined data, compares revenue and expenditure estimates to determine the overall budget deficit. Consulting the Chief Economic Advisor comes next, as the government calculates the necessary borrowings required to meet this deficit.

Post this, revenue allocation becomes a critical phase. The Finance Ministry allocates funds to various ministries and departments for their future expenditures. In cases of disputes over fund allocation, the finance ministry engages in deliberations with the Union Cabinet or the Prime Minister before reaching a final decision.

Pre-budget consultations follow, providing an opportunity for the Finance Ministry to interact with various stakeholders. Representatives from states, bankers, agriculturists, economists, and trade unions are among the diverse groups involved. After considering the myriad of requests during these consultations, the Finance Minister, in extensive discussions with the Prime Minister, makes the final decisions.

The tradition of the 'Halwa Ceremony' marks the official commencement of the budget events. A few days before the budget presentation, the Finance Ministry prepares a kadhai of the popular Indian sweet dessert, halwa. The Finance Minister, by stirring the kadhai and serving the sweet to officials, signals the initiation of the 'lock-in' period, preventing leaks until the financial statement is presented. The Budget Press, located inside North Block, houses all officials during this period.

On February 1, the Union Budget is finally presented in the Lok Sabha after receiving approval from the President. The Finance Minister outlines the key points and rationale behind the proposals during the presentation. Subsequently, the budget is presented before both houses of Parliament for discussion, requiring approval from both houses before being forwarded to the President for the final nod.