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BASICS OF UNION BUDGET

November 17, 2018

 

 

HOW IS THE UNION BUDGET PREPARED?

 

  • It is the Finance Ministry which usually prepares the Union Budget of India.

  •  A major activity is performed before making the budget, It is called the Economic Survey. This forms the basis for preparation of Union Budgets.

  • Every year around the month of September, a circular is issued to all Union Ministries to provide their requirements.

  • The views of stakeholders such as Trade Unions, farmers, businessmen, FIIs(Foreign Institutional Investors), Economists and Civil Society groups are also consulted and their views are also taken. 

  • The requirements provided by all Ministries are then discussed extensively to prepare the budget.

  • Budgets are prepared for the upcoming financial year which is from April to March.

 

AFTER THE BUDGET IS PREPARED:

 

  • After discussing thoroughly, the Finance Minister takes the final call on the Tax Proposals. These are discussed with the Prime Minister of India before finalizing it. 

 

  • Halwa Ceremony: The Indian dessert Halwa is prepared on large scale as a custom and distributed to all officials involved in preparation and printing of Budget. Just like any other Indian custom, sweets are prepared and distributed before commencement of any important work.

 

 

 

 

  • After the Halwa Ceremony, officials are not allowed to go out of the block  where the documents are printed, nor allowed to contact their family members or use mobile phones, until budget papers are printed, as they are extremely confidential documents.

  • A document called "Summary for the Cabinet" is prepared and presented to the Cabinet the day before presenting the Budget.

 

ALL ABOUT D-DAY:

 

  • On the Budget Day, it is the convention to present the Budget through a Budget Speech by the Finance Minister at Lok Sabha to legislature for approval. A set of rules and procedures are usually followed on this day.

  • It is presented at 11 a.m on the 1st day of February every year for the upcoming financial year which runs from 1st April to 31st March.

  • The Budget Speech is usually made in two parts, Part A talks about the macro economic aspects like Health, Education, Housing,Roads, Airports, Employment, Agriculture etc.Part B talks about the Tax Proposals.

  • The opening lines of the Budget Speech goes like this "Madam Speaker/ Mr. Speaker, I rise to present the budget for the year _____

 

WHAT HAPPENS AFTER THE BUDGET SPEECH?

 

  • After the budget speech, general discussions or debates and voting on the matters concerning the budgets take place. First a general discussion is done. Then both the houses Lok Sabha and Rajya Sabha goes into recess.

  • A cut-off time is prescribed for the discussions. Then comes the voting process, voting is done by  the members of parliament for "Demand for Grants" (approval for meeting expenses from the Consolidated Fund Account) whether or not all matters are discussed. This process is called Guillotine. 

  • After voting, a bill called Appropriation Bill is passed. This acts as an authorization to withdraw funds from the Consolidated Fund Account

  • After Appropriation Bill, a voting is done again for Finance Bill concerning tax related matters.

  • After Finance Bill is passed in the parliament, it becomes the Finance Act.

 

 

 

 

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