“The Budget
division in the Finance Ministry has complete responsibility over the document”
“An Annual Budget is not only necessary, but compulsory according to the Constitution”
What is a
budget and what does it consist of?
A #Budget is an estimate of outflows
and inflows that a Government will incur during a financial year. It consists
of actual figures for the first year and the budgetary estimate for the present
year. For example, a Budget presented in Feb 2019 will have the preceding year,
i.e. 2018-19’s actual figures and the evaluations for 2019-20.
When is it presented and by whom?
The Budget is introduced on a day
that is determined by the Parliament. While generally it was displayed on the
last working day of February, this year, because a new government has come into
power, it will be presented on 1 February.
The Budget is presented by the
Finance Minister. The Budget division in the Finance Ministry has total duty
over it, however it requires last endorsement from the Prime Minister.
A timetable is drawn up by the
Budget Advisory Committee of the Parliament. In this calender, a settled time
is given for every Ministry to talk about their requirements preceding the
Budget introduction.
Is an annual Budget necessary?
It is not only necessary, but
compulsory. Under Article 112 of the Constitution, a Statement of Receipts and
Payments (estimated) has to be tabled in the Parliament for every financial
year. The Receipts and Payments articulation contains united store, possibility
support and people in general record.
The consolidated fund is a
statement of all the inflows, such as tax revenues; and all expenditure, which
constitute outflows. To withdraw from this fund the government requires
parliamentary authorisation. The contingency fund is a corpus of about Rs. 50 crore
kept aside for unforeseen expenses. The public account is one where all money
raised from government schemes, such as Provident Fund, is accounted for.
What does the Budget document contain?
The budget speech and the document
has two parts – Part A and B.
Part A is the macroeconomic part of
the budget where various schemes are announced, and allocations are made to
several sectors. The priorities of the government are also announced in this
part.
Part B deals with the Finance Bill,
which contains tax collection proposition, for example, salary charge
corrections and indirect taxes.
What is the process of Budget approval? What will happen if a Budget is
not presented before said date?
The Finance Minister presents the
Budget in the Lok Sabha by by way of a speech and gives an outline of the
Budget. He at that point tables it in Rajya Sabha.
Both Houses of the Parliament then
allot time for a general discussion on the Budget, to which the Finance
Minister replies at the end.
Lok Sabha then takes up a
discussion on each ministry’s expenditure proposals. After this prescribed
period, known as the Demand for Grants, the Speaker applies what is called the
‘guillotine’. Once the ‘guillotine’ is applied, all outstanding demands are put
to vote. Though both the Houses of Parliament discuss the Budget, only the Lok
Sabha votes on it.
The Appropriation Bill is then
introduced after all demands are passed, and once this Bill is passed, the
government receives authorisation to draw from the consolidated fund. Once the
Appropriation Bill becomes an Act, the Finance Bill is passed. Once this is
done, the final Budget gets approved.
In the event that the Budget isn't
passed inside the reported date, Article 116 of the Constitution empowers the
Lok Sabha to pass the Vote-On-Account, a record which covers just the use
brought about.
