Finance Minister Nirmala Sitharaman will present the budget for 2021-22 on February 1. This time the budget is special, because this is the first time that the budget document has not been printed. This time the budget is completely paperless and will be released digitally. Usually the process of budget making starts 5 months before presentation. Most of us remain curious about the process of budget making. Let us discuss some important questions about budget.
What is the Budget?
Just as we need a budget to run our house, similarly a budget is needed to run the country. The budget we make for our house is usually of one month. In this, we calculate how much we spent this month and how much we earned. Similarly, the country’s budget is also account of these things. The difference is, it has an accounting period of a year. The Budget is mentioned in Article 112 of the Indian Constitution as ‘Annual Financial Statement’.
The government gives three types of figures in the budget. These are – Budget Estimate, Revised Estimate, Actual. Now let’s understand what these three are.
- Budget Estimate: This is for the upcoming year. This time, the budget estimate for 2021-22 will be stated. That is, in this, the government estimates the earnings and expenditure in 2021-22.
- Revised Estimate: This is the estimate of previous year. This time the budget will be presented, the revised estimate of 2020-21 will be told. That is, according to the estimate that the government had made in the last budget, how much did it earn and how much did it spend. The revised estimate may be lower than the budget estimate.
- Actual: It is of two years ago. This time the budget of 2019-20 will be stated in the budget. That is, how much the government actually earned and how much was spent in 2019-20.
Also read: What Is Economic Survey And Its Significance?
Budget preparation starts 5 months prior to tabling it down. Usually in September, the Budget Division of the Department of Economic Affairs issues circulars to all Ministries, Departments, States and Union Territories. In this, they are asked to indicate the necessary funds, estimating their expenses for the coming financial year.
After this, in October-November, the Finance Ministry holds a meeting with the officials of other Ministries/Departments and decides which Ministry or Department should be paid how much. A blueprint is prepared after that meeting.The budget document is printed after everything is finalized. But this time there will be no printing.
Halwa ceremony take place in the finance ministry about a week before the budget is presented. After this, all the concerned officers are kept in the Finance Ministry and are not allowed to contact any outsider. Officers are allowed to come out when the budget is presented.
Prior Recommendation of President
The President’s approval is required before presenting the budget in Parliament. After the approval of the President, it is placed before the cabinet and then introduced in both houses of Parliament.
What happens after the budget is presented?
After the presentation of the budget, it has to be passed in both the houses of Parliament i.e. Lok Sabha and Rajya Sabha. Budget comes into force from 1 April after passing from both houses. Budget session completes in two parts. Before voting on budget in parliament the budget is scrutinized by different standing committees of Parliament.
The country’s first budget came 161 years ago
The country’s first budget was presented on 7 April 1860 by the British Government’s Finance Minister James Wilson. The first budget after independence was presented by the country’s first finance minister, RK Shanmukham Chetty, on 26 November 1947. This budget was for the period from 15 August 1947 to 31 March 1948. The first budget after the establishment of the Republic on 26 January 1950 was presented by John Mathai on 28 February 1950.