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Wednesday Feb 08, 2023

Union Budget 2023 | How is the Union Budget prepared? From Preliminary Meetings to Presidential Approval


Photo - ANI

Photo – ANI

Delhi: The budget-making process begins in August–September and involves several stages, including the pre-budget meeting and the Halwa ceremony. It ends with the presentation of the budget in the Parliament and its assent by the President. The Government of India presents the Union Budget every year on 1 February. The Union Budget is an important document that outlines the government’s fiscal policies, plans and programs for the upcoming financial year. The process of making the budget starts in August-September, about six months before its date. It prepares a plan for the government to spend its revenues and allocate funds for various development initiatives and other immediate needs. The process of budgeting involves several steps. Let’s understand it one by one.

Phase 1

The Ministry of Finance issues circulars to all Ministries, States, Union Territories and autonomous bodies at the initial stage of the budget-making process. These circulars also contain essential guidelines, which are used by the Ministries to express their needs and demands. These ministries disclose their earnings and expenditure for the previous year, apart from presenting estimates. Once requests are received, top government officials evaluate them and discuss them with ministries and the Department of Expenditure.

Phase 2

Once the information is verified, the Finance Ministry allocates the revenue to the various divisions. In case of any disagreement on the distribution of money, the Finance Ministry consults with the Union Cabinet or the Prime Minister. Other stakeholders including farmers, small business owners and foreign institutional investors are also consulted by the Department of Economic Affairs and Department of Revenue for further understanding.

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step 3

The Finance Ministry also arranges pre-budget meetings with various stakeholders to know about their recommendations and requirements. These participants include state representatives, farmers, bankers, economists and trade unions. After considering all the requests, it is discussed with the Prime Minister before being confirmed.

step 4

A few days before the announcement of the budget, it is the annual tradition of the government to hold the Halwa ceremony. The function initiates the start of budget document printing. A huge kadhai (large frying pot) is used to make halwa, which is then fed to the entire staff of the Ministry of Finance as part of the ceremony.

step 5

The presentation of the budget in the Parliament is the last step in the budget making process. The finance minister makes a presentation on the first day of the budget session. The Minister summarizes the key points of the document. After presentation, the budget is placed before both the Houses of Parliament for discussion. After the approval of both the Houses, the budget is sent to the President for approval. Formulation of the budget is a long process involving several stages and consultations. Every step is necessary to ensure that public money is used judiciously and allocated appropriately. The importance of this document can never be ignored as it determines how the government functions and spends its resources to develop the nation.



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