By Ritika Chauhan
The Union Budget for the year 2018-19 is all set to be presented on 1st February 2018. The budget session will begin on 29th January of this month. The yet-to-be-presented budget marks the fifth one in the tenure of the BJP led National Democratic Alliance (NDA). It is also the last budget to be presented by them before the 2019 Lok Sabha elections.
Economists all over India believe that this budget is bound to hold a significant position in the history of budgets because of various reasons. This budget not only precedes the general elections of 2019 but also eight of the state assembly elections in the near future.
Budget making in India
The important bodies involved in the process of budget-making are the Ministry of Finance, the budget division of the Department of Economic Affairs and the NITI Ayog. The budgets in India pass through four stages: Budget formulation, budget enactment, budget execution, and finally, the legislative review of budget implementation
According to conventions, budget making begins several months in advance, around August-September, when different Ministries, States, UTs, Armed forces and other bodies send in their requirements and estimates. Meetings and discussions are then held with businessmen, economists, farmers and other stakeholders to note down their views. Tax proposals are evaluated. Once all inputs are consolidated, the Finance Ministry prepares a final draft for in consultation with the Union Ministers. An approval by the Prime Minister is then required.
There are primarily three different figures that need to be presented. These include budget estimates for the coming fiscal year, revised estimates and reallocation of funds and actual expenditure and receipts of the previous year.
After an approval from the PM is received, a particular date is selected by the government for presentation for the budget in the Parliament. This date needs to be approved by the Speaker first, and then the President. Before the arrival of this date, a summary is sent to the Cabinet Ministers and the President. Once all the necessary approvals are received, the Finance Minister presents the budget on the scheduled date. The famous ‘Halwa Ceremony’ takes place when the budget is given for printing and all officials and staff are given the sweet dish to begin the process on an auspicious note.
The budget is presented in two parts. The Minister first discusses the general economic survey and the policy proposals for the coming year. He then moves onto the tax proposals for his next part. Following this lies the true test of democracy, when the elected members of the Parliament discuss, debate and criticise the budget in a constructive manner. The Finance Minister is expected to address the concerns and doubts of these members. During these debates, the standing committees put forward their demands for grants and put them to vote.
An Appropriation Bill is voted upon in the Lok Sabha that is concerned with utilizing funds from the Consolidated funds of the country. The Finance Bill is then voted upon and passed as a Money Bill and is further sent for approval of the President. An approved budget is enacted from 1st April onwards.
The first Indian budget dates back to 1869 when James Wilson, the designated Financial Member under the Viceroy of India. He is known to have founded ‘The Economist’ as well as ‘Standard Chartered Bank’. The first budget of Independent India was presented by R.K. Shanmukham Chetty on November 26, 1947.
Budgets across the world
The United States budget process begins when the President submits a request to the Congress. The important body concerned with the formulation is the OMB or the Office of Management and Budget, the Executive branch of the President’s office. Congress reviews the President’s resolution and sets forth its own guidelines and recommendation. The budgets in the US deal concurrently with three years at one time, that is, implementation for the current fiscal year, seeking funds for the next fiscal year and planning for the fiscal year after that.
Japan’s budget process follows the parliamentary system or cabinet system, similar to what is followed in India. The Finance Ministry’s Budget Bureau has primary authority to formulate the budget. The budget in France in France is prepared by its government and approved by the National Assembly and the Senate. However, the Constitution does not permit the National Assembly and Senate to make any amendments to the total spending and revenue amounts proposed by the government.
The annual budget of the United Kingdom is also known as the Autumn Budget. It is announced by the Chancellor of the Exchequer in the House of Commons. The budget is usually released in March, a month before the next fiscal year begins. It is set by the HM Treasury.
Featured Image Source: Pixabay
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