InvestorQ : How is the Union Budget prepared?
Anjali Desai made post

How is the Union Budget prepared?

1 year ago
The Union Budget is the annual financial statement of the revenues and expenditure of the government and lays out a fiscal roadmap for India for the next year. It is prepared by the Indian Finance Ministry in consultation with NITI Aayog and other Indian Ministries. Within the Finance Ministry, the budget division of the department of economic affairs (DEA) is the nodal body responsible for producing the Union Budget.

The Union Budget making process is considered in the month of August-September and follows the below six steps:
Step 1: Issuance of circulars
The Finance Ministry issues circulars to various Indian states, union territories, and ministries asking them to prepare and provide estimates for the next year. Apart from the estimates, the Finance Ministry also asks to provide details about their revenues and expenditure in the past year.

Step 2: Consultation
After the Finance Ministry sends requests, the top officials of the government scrutinize the requests. The data is sent to the Finance Ministry after extensive consultation between the government ministries and the department of expenditure and revenue.

Step 3: Allocation of Revenues
After the Finance Ministry receives the estimates, it allocates revenues for future expenditure to various departments. Other stakeholders such as small business owners, farmers, etc. are also considered.

Step 4: Pre-Budget meetings
The Finance Ministry holds pre-budget meetings with all the stakeholders included in the Union Budget. After the meeting, the Finance Ministry takes the final call on the demands and discusses them with the Prime Minister.

Step 5: Budget Printing
A halwa ceremony is traditionally hosted every year, a few days before the Union Budget is presented. The ceremony marks the printing of the Union Budget.

Step 6: Presentation
The Indian Finance Minister presents the Union Budget on 1st February in the Lok Sabha.