Union Budget- Part 2

In the second part I will discuss how is the Union Budget presented and passed. 

Presentation of the Union Budget:  First of all the Secretary General of Lok Sabha   seeks the permission of the President of India, once the speaker agrees to the date as recommended by the Government. On the Budget the Finance Minister before presenting the final Budget presents a “Summary For the Cabinet” that contains all the budget proposals. Finally the Budget is presented in the LokSabha with the key estimates and proposals.

Well, the speech of the Finance Minister is divided into two parts that is part A and part B. Part A consists of the general economic survey of the country and the policy statements where as Part B consists of the tax proposals. After the Fin Min has given the Budget Speech an “Annual Financial Statement” is given in the Rajya Sabha.

Following are the Budget Documents that are presented:

·         Annual Financial Statement.

·         Demands for Grants.

·         Receipts for Budget.

·         Expenditure Budget Vol-1.

·         Expenditure Budget Vol-2.

·         Finance Bill.

·         Memorandum explaining Finance Bill.

·         Budget at a Glance.

·         Highlights of Budget.

·         Status of Implementation of Announcements.

·         Fiscal Responsibility and Budget Management Act.

·         Key to Budget Documents.

·         Budget Speech.

Passing of the Union Budget: After the Budget is passed, a general discussion takes place which is then followed by a detailed debate.

 The General Discussion takes place in  Lok Sabha for two to three days where a “Vote on Account” for carrying out the expenditure is obtained from the Parliament and the Finance Minister is posed with questions from all the parties regarding any amendment that is to be brought in the proposed Union Budget. At the end of the discussion the FM answers to all these questions. After this, the House is adjourned for few days.

When the house is reopened a detailed discussion takes place where the demands for grants are put by standing committees. Any member of the parliament can propose for a cut in the allocation of funds through any of the following cut motions :

1.       Disapproval of Policy Cut.

2.       Economy Cut.

3.       Token Cut.

The speaker of the Lok Sabha then puts all the Demand for Grants in the Vote of the House and an Appropriation Bill is put to vote in Lok Sabha . After the Appropriation Bill the Finance Bill is passed by Parliament. It is also known as money bill and is required to be passed by both the houses of the parliament with the permission of the President within 75 days of introducing the bill. Once the Finance Bill is passed the Budget process is over.

Union Budget-Part 1

By reading the title of this page you must be thinking that this blog is all about the estimations, highlights and projections of the Union Budget 2013 -14. Well, if you are thinking that then you are wrong because in this article I am going to discuss about who makes a budget, how is the budget made and who presented the first Budget In India. Hence, this article will give you an insight about goes behind making a Union Budget.

Every year the Finance Minister of India presents the Union Budget on the last day of February and it is implemented from April 1. All of us wait for that one day and is glued to our television sets keeping all our important tasks aside.  Well, let us begin with the history.

BUDGET HISTORY

The first budget was presented by James Wilson in the year 1860, the then Finance Minister of India. After independence Liaquat Ali khan presented the Budget in the year1947-48 and the first full fledged budget was presented by RK Shanmukham on 26^th November, 1948.

WHO MAKES THE BUDGET

The Union Budget is prepared in consultation with three departments that is the Finance Ministry, planning Commission and the spending ministries. All the states of India first present their annual demand to the Planning Commission. After this, the Finance Ministry and the Planning Commission issues all the necessary guidelines and the spending limits.

HOW IS THE BUDGET MADE

The Budget Division issues a circular to all the States, Union Ministries and the Union Territories and advises them to prepare the budget for the next year. Pre Budget meetings are made in the month of January.  A final decision is taken on the tax proposals after taking in to considerations the opinions or amendments of the Finance Minister and the Prime Minister. Subsequently, the Department of Economic Affairs and the Revenue Department officials organize a meeting with the stakeholders like FIIs, Economists as well as other civil society groups and form consent.

Given below is the image of the picture of RK Shanmukham Chetty who presented the first Budget in India post independence