| WHAT IS THE BUDGET? |
A Government budget is a legal document that is:
Passed by the legislature. Approved by the President.It is an annual financial statement of estimated receipts and expenditures of the Government of India in respect of each financial year.
| WHAT ARE THE DIFFERENT TYPES OF BUDGET PRESENTED? |
The Union Budget is presented to the Parliament in two parts:
a. Railway Budget pertaining to "Railway Finance".b. General Budget, which gives an overall picture of financial position of the Government of India. It includes the effect of "Railway Budget”.| WHY DO WE NEED A BUDGET? |
The main objective of Government financial management is to determine how adequately the financial and resource management responsibilities have been discharged.
It requires the broad objectives of the Government to be broken down into detailed work plans for each programme and sub-programme, activities and projects for each unit of the Government organization.
| HOW IS THE BUDGET PREPARED IN INDIA? |
Budget preparation in India is a calculative process between the Ministry of Finance and the spending Ministries.It is a combination of:
a. Top down approach with the Ministry of Finance issuing guidelines or communicating instructions to spending Ministries, and
b. A bottom-up approach, wherein the spending Ministries plan and present requests for budget allocation.
| WHAT ARE THE COMPONENTS OF THE BUDGET? |
Article 112 of the Constitution of India stipulates that Government should lay before the Parliament an Annual Financial Statement popularly referred to as ‘Budget’.
The Union Budget presented to the Parliament, besides the Finance Minister's Budget
speech, consists of the following 14 documents:
1. Annual Financial Statement
2. Demands for Grants
3. Receipts Budget
4. Expenditure Budget Volume 1
5. Expenditure Budget Volume 2
6. Finance Bill
7. Appropriation Bill
8. Memorandum explaining the provisions in the Finance Bill
9. Budget at a Glance
10. Highlights of the Budget
11. Macro-economic policy framework for the relevant financial year
12. Fiscal Policy Strategy Statement for the Financial year
13. Medium term Fiscal Policy Statement
14. Medium term Expenditure Framework Statement
Other Budget related documents are:
Detailed Demand for Grants Economic SurveyStatus of implementation of provisions in Finance Minister's previous Budget speech.| WHAT IS THE PROCEDURE FOR APPROVAL OF UNION BUDGET BY THE PARLIAMENT? |
The Budget process has the following procedures:
Before presentation of the Budget, President’s recommendation is obtained under Article 117(1) and 117(3) for introduction and consideration in the Lok Sabha.
After President’s recommendation, Budget is then laid before the Lok Sabha by the
Finance Minister with the "Budget speech". It is not discussed in the Lok Sabha on that
day.
It is then laid before the Rajya Sabha, which can discuss it, but cannot vote on the
demands for grants.
The Discussion
on Budget in the Parliament is conducted in two 
stages - GeneralDiscussion and Detailed Discussion.
After general discussion on the budget is over, Parliament is adjourned for a period
during which the 24 Departmental Standing Committees examine and discuss the
demands for grants of concerned ministries and prepare reports on them.
Following discussions, there is voting on demands for grants.
After the demands for grants have been passed by the House, a Bill to provide
for appropriation out of the Consolidated Fund of India of all moneys required to
meet the grants and the expenditures charged on the Consolidated Fund of India is introduced, considered and passed by the House.
The introduction of such Bill cannot be opposed. The scope of discussion is limited to
matters of public importance or administrative policy implied in the grants covered
by the Bill and which have not already been raised during the discussion on demands for grants.
The Finance Bill, containing provisions for giving effect to financial proposals of
government is introduced immediately after the presentation of the Budget. The
introduction of the Bill cannot be opposed. This completes the budgetary process.
As the whole process of Budget generally goes beyond the current financial year, a
provision has been made in the Constitution empowering the Lok Sabha to make
any grant in advance through a vote on account. This is to enable the Government to
continue functioning till the demands for grants, the Appropriation Bill and the Finance Bill are passed.
| 7. WHEN IS BUDGET PRESENTED IN THE LOK SABHA? |
According to Article 204(1) of Rules of Procedure and Conduct of Business in the Lok Sabha, the Budget is presented on the day as fixed by the President of India.
Usually it is presented at 11 am on the last working day of February about a month before the commencement of financial year.
WHY WAS THE BUDGETARY PROCESS UNDERTAKEN TWICE IN 2014?
|
In an election year, the Budgets may be presented twice—first to secure a Vote on Account for a few months and later in full.
WHAT ARE THE LEGAL PROVISIONS UNDERLYING THE BUDGETARY PROCESS?
|
The procedure for presentation of the Budget in and its passing by the Lok Sabha is laid down in
Articles 112—117 of the Constitution of IndiaRules 204—221 and 331-E of the Rules of Procedure and Conduct of Business in the Lok SabhaDirection 19-B of Directions by the Speaker.| WHAT IS BUDGET CIRCULAR? |
The Budget Circular is issued in the month of September during the budget cycle. It marks the beginning of the Budget process.
It guides Ministries and Departments for preparing:
Revised Estimates for the past year Budget Estimates for the coming year
WHAT IS PLAN AND NON-PLAN EXPENDITURE?
|
Plan expenditure is associated with productive expenditure, which increases the productive capacity of the economy.
Non-plan revenue expenditure is accounted for by interest payments, subsidies (mainly on food and fertilisers), wage and salary payments to government employees, grants to States and Union Territories governments, pensions, police, economic services in various sectors, other general services such as tax collection, social services, and grants to foreign governments.
Non-plan capital expenditure mainly includes defence expenditure, loans to public
enterprises and loans to States, Union Territories and foreign governments.
WHAT ARE THE CATEGORIES OF GOVERNMENT ACCOUNT?
|
The Government account is categorised into the following -
Consolidated Fund of IndiaContingency Fund of IndiaPublic Account
Source:GOI, Ministry of Finance