behind-the-scenes-of-the-making-of-india-s-union-budget

 

As the Parliament gears up for its Budget session, set to commence from January 31st to February 9th, all eyes are on Finance Minister Nirmala Sitharaman, who will reportedly present the Interim Budget for the financial year 2024-25 on February 1st. While the Union Budget holds immense significance for India's economy and governance, the intricate process leading to its formulation often remains behind the scenes.

 

According to Article 112 of the Constitution, the Union Budget is an annual financial statement estimating the government's receipts and expenditures for a specific fiscal year. However, its inception and crafting require meticulous planning and coordination among various governmental bodies.

 

The genesis of the Union Budget starts about six months before its presentation. In August-September, the Ministry of Finance issues circulars to all concerned entities, initiating the budget process and outlining the need for estimates and financial disclosures.

 

This marks the beginning of a collaborative effort involving the Ministry of Finance, Niti Aayog, and other relevant ministries. The Budget division of the Department of Economic Affairs assumes a pivotal role in coordinating and producing the budget.

 

Ministries submit their earnings, expenses, and estimates, which undergo thorough scrutiny by top officials and discussions with the Department of Expenditure. Validated information leads to revenue allocations to various divisions for upcoming expenditures. In case of disagreements, consultations with the Union Cabinet or the Prime Minister help in resolving differences.

 

The process doesn't end with internal discussions. The Finance Minister and officials engage in extensive pre-budget meetings with stakeholders from diverse sectors, including revenue departments, industry associations, chambers of commerce, farmers' associations, trade associations, and economists. These consultations aim to incorporate diverse perspectives and address sector-specific concerns.

 

After extensive deliberations and consultations, the Finance Minister makes the final decisions on demands, discussing proposals with the Prime Minister before finalizing the budget. Simultaneously, the Finance Ministry conducts the 'Economic Survey' to assess the state of the economy, providing critical insights into economic trends and challenges.

 

The Economic Survey, essentially a review of financial developments from the previous fiscal year and the current economic condition, serves as a foundation for budgetary decisions, offering valuable insights into policy formulation and fiscal management.