Budget 2024: Step-By-Step Process Of How The Union Budget Is Prepared

India's FM Sitharaman and the BJP led govt is set to present its last union budget on February 1, before the nation goes into Lok Sabha elections in April-May 2024. And just like every year, the preparations have been in full swing despite it being an interim budget this time.

But have you ever wondered how the entire budget preparation process is done? What is the first and the last step? Read on as we simplify the budget making process to help you understand what all steps the Finance Ministry takes when preparing the union budget for the nation.

5 Step Process Of Union Budget Preparation

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1. Pre-Budget Circulars & Discussions

About six months prior to the budget's presentation, the budget-making process starts. The Finance Ministry provides the necessary directives and guidelines to pertinent ministries and departments through Budget Circulars. The disbursing and field officers receive these circulars and discuss with each other the financial requirements for the upcoming fiscal year as well as the department's expenditures and receipts for the previous and current fiscal years.

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Also Read: Meet Nirmala Sitharaman's Team Behind Interim Budget 2024

2. Data Review & Estimates Projection

Senior officials in their departments closely review the information and projections given by officials at the local level. The data and estimates are forwarded to the relevant ministries for additional review after they have been authorized or, if needed, revised. Ultimately, the estimates and data arrive at the Finance Ministry, where they undergo a thorough examination and correlation with the existing economic conditions and available resources in order to ascertain their viability.

3. Consultation With The PM Or Cabinet

The Finance Ministry creates new public welfare programs and distributes revenues to other administrative ministries following careful analysis.

When disagreements arise about the distribution of resources, the Finance Ministry consults with the Prime Minister or the Union Cabinet, whose choice is final. The Finance Ministry, working with the Central Board of Direct Taxes and the Central Board of Excise and Customs, prepares a report on the expected revenues to be generated in the upcoming fiscal year once the funds are set aside for future expenditures.

The final Union Budget is then produced by consolidating these reports. In order to obtain information and guarantee an effective budget, the Finance Ministry interacts with public domain stakeholders, such as farmers and small business owners, during this process.

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4. Printing Of Budget After Halwa Ceremony

The Union Budget printing process starts with a custom known as the "halwa ceremony." The Finance Minister, along with other participating officials and staff, share the halwa, a traditional Indian dessert, during this ceremony. The Union Budget starts to print after the ceremony. Since they have exclusive access to the budget before it is presented to Parliament, all officials and staff members involved in its creation are kept confined to the ministry's grounds during this phase and are not allowed to interact with the outside world.

5. Budget Presented By Finance Minister

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In Parliament, the Union Budget is presented by the Finance Minister. The Budget has been presented on February 1st in recent years.

Budget Is Presented Twice In Election Years

There are two budget presentations during election years, such as this year, 2024. Firstly an interim budget is presented on February 1st, which shows the govt¡¯s projected spending and revenue for the next few months. The final budget for the remaining financial year is presented by the newly elected government after the election results. It is expected to be presented in July.

Also Read: Ahead of Budget 2024, Here's The Journey Of India's Finance Minister Nirmala Sitharaman

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