The Union Budget for the year 2022-23 will be presented in Lok Sabha by Finance Minister Nirmala Sitharaman on 1 February. The 256th budget session will begin on January 31, just two weeks before the elections of five states – Goa, Uttarakhand, Manipur, Punjab and Uttar Pradesh.
While the first half will last from January 31 to February 11, the second half will start from March 14 to April 8. The budget will be presented in the lower house of parliament before it is presented in the Rajya Sabha session.
Before viewing the budget, News18.com answers your questions about the important document.
What is the budget?
Article 112 of the Indian Constitution deals with the annual financial statement. As per Article 112, a statement of the estimated revenue and expenditure of the Government of India must be presented before Parliament in respect of each financial year starting from 1st April to 31st March. This statement entitled “Annual Financial Statement” is the main statement of the budget document.
The annual financial statement shows the receipts and payments of the Government of India as per the three parts in which the accounts are kept – Consolidated Fund, Contingency Fund and General Account.
The Union budget is classified into two types: revenue and capital. The revenue budget deals with government revenue receipts (tax revenue and other revenue) and the expenditures to be covered by these revenue. Revenue expenditures are for the normal operation of public administrations and various services, interest charges on debts incurred by the government, subsidies, etc., mainly represent expenditures not conducive to the creation of assets.
On the other hand, capital budget consists of capital receipts and payments. The main items of capital receipts are loans obtained by the Government of India from public and other parties.
Who makes the budget?
The budget is prepared by the Ministry of Finance after consulting with all other ministries regarding their funding requirements. On Budget Day, the annual financial statement is presented in Lok Sabha by the Finance Minister. While the presentation part of the process is the shortest, forming a budget takes several months.
Besides states, the Ministry of Finance consults with NITI Aayog and expenditure ministries. All ministries are required to submit their claims based on the Ministry of Finance’s spending guidelines. The Budget Division of the Department of Economic Affairs in the Ministry of Finance is the nodal body responsible for preparing the budget.
Since 2017, the union budget is submitted on February 1, allowing parliament to approve it before March 31 itself.
How is the budget set?
The Budget Division issues a circular to all Union Ministries, States, UTs, Autonomous Bodies, Departments and Defense Forces to prepare their estimates for the next financial year. With the receipt of the estimates, intensive consultations are taking place between the federal ministries and the Expenditure Department of the Ministry of Finance.
Meanwhile, the Department of Economic Affairs and the Revenue Service meet all stakeholders such as farmers, entrepreneurs, FIIs, economists and civil society groups to take their views. Once the pre-budget meetings are over, the Federal Minister of Finance makes a final call on tax proposals.
Before freezing the Union budget, the proposals are discussed with the Prime Minister.
How is the budget presented?
Before presenting the budget, the Minister of Finance briefs the Cabinet through a “Council of Ministers Summary”.
The Minister of Finance presents the budget in the Lok Sabha, and reads the ‘Budget Letter’ for that day in the Lok Sabha. A budget letter sets out the highlights of the entire budget, its main estimates and proposals which may run into several thousand pages.
The budget was brought up in Parliament following the minister’s speech and a copy of the budget was presented in the Rajya Sabha shortly after it was presented in the Lok Sabha.
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