The Union Budget of India or the Annual Financial Statement, as Article 112 of the Constitution calls it, has historically been announced in the month of February. While the budget speech lasts a few hours on average, the process behind the creation and presentation of the budget take much longer.

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The budget-making process starts a whole six months before the date of the presentation, in August-September under the purview of the Budget Division of the Department of Economic Affairs (DEA) under the Ministry of Finance.

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Notices and budget circulars are sent out to various ministries and departments to prepare a skeleton budget for the coming year. The ministries reply with the details about financial expenditures, receipts and expected financial requirements for the new fiscal. Multiple rounds of scrutiny, revision and approval happen before the data is sent forward to the Finance Ministry.

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After extensive consultation between various ministries, NITI Ayog and the Department of Expenditure, the Finance Ministry allocates the revenue to various departments.

Another round of meetings is undertaken by the Finance Minister, the Department of Economic Affairs and the Department of Revenue to ensure that various stakeholders of the Indian economy, like state representatives, bankers, agriculturists, and economists, are heard and their inputs are considered.

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Finally, any new welfare plans and proposals that are discussed have to be cleared by the Prime Minister before they are locked in.

As the final budget is prepared, just before the printing of the Union Budget, the government hosts the traditional halwa ceremony. The documents are printed at a press in North Block, though in 2021 no budget papers were printed due to the COVID-19 situation.

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The Finance Minister then briefs the Union Cabinet about the Budget before it is presented in the Lok Sabha. On February 1, the Finance Minister makes the Union Budget presentation before it is tabled for discussion in the Parliament.

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(Edited by : Shoma Bhattacharjee)

First Published:Jan 20, 2022 6:32 PM IST