The finance ministry’s annual exercise of printing of Budget documents commenced last week with the ritual ‘halwa ceremony’ at the press located in the basement of the North Block. After this ceremony, officials and staff directly associated with the Budget making and printing are required to stay in the ministry, cut off from their families. However, the entire Budget making had commenced months ago when the finance ministry sought estimates from various ministries. Here’s ET’s step-by-step guide to the exercise…
WHO MAKES THE BUDGET
Budget is made through a consultative process involving ministry of finance, NITI Aayog and spending ministries.
Finance ministry issues guidelines to spending based on which ministries present their demands.
The Budget Division of the Department of Economic Affairs in the finance ministry is the nodal body responsible for producing the Budget.
HOW IS THE BUDGET MADE
In September the Budget Division issues a circular to all Union ministries, states, UTs, autonomous bodies, depts and the defence forces for preparing the estimates for the next year.
After ministries & departments send in their demands, extensive consultations are held between Union ministries and the Department of Expenditure of the finance ministry.
At the same time, the Department of Economic Affairs and Department of Revenue meet stakeholders such as farmers, businessmen, FIIs, economists and civil society groups to take their views.
Once the, pre-Budget meetings are over by late Jan, a final call on the tax proposals is taken by the finance minister. The proposals are discussed with the PM before the Budget is frozen.
The Secretary General of the Lok Sabha Secretariat seeks approval of President after the Speaker agrees to the date suggested by the government.
FM presents the budget in the Lok Sabha outlining key estimates and proposals.
Finance Minister briefs the cabinet on the budget proposals through a ‘summary for the cabinet’ just before he presents the budget.
The ‘Annual Financial Statement’ is laid on the Table of the Rajya Sabha after the FM’s speech.
On the morning of the budget, the government seeks President’s approval through a “Summary for the President” approved by the FM and PM.
FM’s budget speech has two parts. Part A deals with general economic survey of the country and policy statements. Part B contains tax proposals.
NO DISCUSSION TAKES PLACE THE DAY THE BUDGET IS PRESENTED.
HOW IS THE BUDGET PASSED
Budget debate is split into TWO PARTS
A few days after the budget, there is a general discussion in Lok Sabha for 2-3 days.
The FM replies to the debate at the end of the discussion.
A ‘VOTE-ON-ACCOUNT’ for expenditure in initial months of financial year is obtained from Parliament.
The House is adjourned for a fixed period.
During the break, demands for grants are considered by relevant standing committees.
These demands are taken up one by one as per a schedule decided by the business advisory committee of house.
Any member can seek a cut in allocation through one of the three cut motions:
► Disapproval of Policy Cut
► Economy Cut
► Token Cut
On the last day of the discussion on the Demands for Grants, the Speaker puts all the outstanding Demands for Grants to the vote in the House.
After the demand for grants, Appropriation Bill is put to vote in Lok Sabha. It gives the government powers to spend from the Consolidated Fund of India.
After the Appropriation Bill, Finance Bill is considered and passed by Parliament as a Money Bill.
The bill is required to be passed by both the Houses and receive assent of the President within 75 days of its introduction.
Once the Finance Bill is passed and signed by the President, the budget process is over.
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