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How is the Union Budget
Formulated?
The budget process in
India, like in most other countries, comprises four distinct phases:
i) Budget formulation- preparation of estimates of expenditure and receipts for
the ensuing financial year;
ii) Budget enactment-
approval of the proposed Budget by the Legislature through the enactment of
Finance Bill and Appropriation Bill;
iii) Budget execution-
enforcement of the provisions in the Finance Act and Appropriation Act by the government—collection of receipts and making disbursements for
various services as approved by the Legislature;
iv) Legislative review of
budget implementation- audits of government’s financial operations on behalf of
the Legislature.
Process commences in August- September
By convention, the Union
Budget for next financial year is presented in Lok Sabha by the finance
minister on the last working day of February. However,
the process of budget formulation starts in the last week of August or the first fortnight of September. To get the process started,
the Budget Division in the Department of Economic Affairs under
the Ministry of Finance issues the annual budget circular to all the Union government
ministries/departments around August- September. The Circular contains detailed
instructions for these ministries/ departments on the form and content of the
statement of budget estimates to be prepared by them.
