The Union Budget contains details about the estimated receipts and government expenditures for a particular fiscal year. The Union Budget 2024-25 will be presented by Union Finance Minister Nirmala Sitharaman on February 1, 2024, at Lok Sabha. It will be an “Interim Budget” for the fiscal year commencing on April 1, 2024, and concluding on March 31, 2025.
To know more about the union budget, read the following article.
How Is The Budget Prepared?
Budget-making is a long process that includes months of planning, consulting, and compiling to create the final draft of the budget.
The process begins almost six months before the financial statement is presented in Parliament. Deliberations are commenced in August-September of the previous year.
- As a first step, the union finance ministry issues circulars to all ministries, states, union territories, and autonomous entities, asking them to prepare estimates for the upcoming financial year. All ministries, UTs, and autonomous bodies are supposed to disclose their earnings and expenses for the previous year in addition to offering estimates.
- Then, The proposals sent by all the ministry’s UTs are received by the revenue secretary. Extensive consultations to examine these proposals by Niti Aayog and the Department of Expenditures is done. Then, it is sent to the finance ministry. Then, the finance ministry Compares the estimates of revenue and expenditure to find out the overall budget deficit. The chief economic advisor determines the borrowings required by the government to meet the Budget deficit.
- Then, the Finance Ministry allocates revenue to various ministries and departments for their future expenditure. In case of disagreements, the finance ministry deliberates with the Union Cabinet or the prime minister.
- Finance Ministry holds pre-budget consultations with various stakeholders, which include state representatives, bankers, agriculturists, economists, and trade unions. After all this, the Finance Minister makes the final decision with the PM.
- As per tradition, the Finance Ministry hosts a ‘Halwa Ceremony’ a few days before the Union Budget is presented. What makes the ceremony significant is that it initiates the ‘lock-in’ for the ministry staff to prevent leaks, lasting until the financial statement is tabled.
Finally, the Union Budget is presented in the Lok Sabha by the Finance Minister on February 1, following approval from the President.
Why An Interim Budget?
Interim budget is presented instead of a full budget in the year of Lok Sabha elections because of the following reasons:-
- Major policy reforms or significant changes in taxation are usually avoided in an interim budget to give the incoming government the flexibility to formulate its own roadmap.
- The outgoing government prioritizes maintaining fiscal discipline and managing the deficit in an interim budget, ensuring financial stability for the transition period.
- Indian election regulations prevent the outgoing government from making big financial announcements during the election campaign period.
What Are The Key Sectors That Will Be Focused On In The Union Budget 2024-25?
These key sectors include:-
- Infrastructure – Development, particularly in areas like railways, roads, and renewable energy, will be prioritized.
- Defense – Funding for defense needs will be a priority
- Agriculture – Continued funding for programs like PM Kisan Samman Nidhi and Pradhan Mantri Fasal Bima Yojana is likely.
- Education And Healthcare – Funding for programs like Ayushman Bharat Yojana is expected to continue.
- Social Welfare – Schemes like MGNREGA, food security programs, and pensions for marginalized groups are expected to see continued funding.
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