The Annual Financial Statement or the Statement of the Estimated Receipts and Expenditure of the Government of India in respect of each financial year is popularly known as the Budget. The Budget process is a massive exercise. The exercise has different stages and each stage kicks off at a different stage of Budget making process.
The finance ministry has the overall responsibility for framing the budget. Each department of the ministry has specific responsibilities including Department of Expenditure,Department of Economic Affairs,Department of Revenue.With inputs from the Planning Commission,The Comptroller & Auditor General,Administrative Ministries. Extensive consultations are held with other stakehoders – industry, political parties, economists and civil society groups
Once the pre-budget meetings are over, a final call on the tax proposals is taken by the Finance Minister, in consultation with the PM.
Passing the budget
The Finance Minister presents the Budget in Lok Sabha on the last working day of February.The Budget speech has two parts. Part A deals with general economic survey & policy statements while Part B contains taxation proposals.The Annual Financial Statement is laid on the table of the Rajya Sabha after the FM’s speech
Alongwith the ‘Annual Financial Statement’ Government presents the following documents: an Explanatory Memorandum briefly explaining the nature of receipts and expenditure during the current year and the next year and the reasons for variations in the estimates for the two years, the Books of Demands showing the provisions Ministry-wise and a separate Demand for each Department and service of the Ministry. The Finance Bill which deals with the taxation measures proposed by Government is introduced immediately after the presentation of Budget. It is accompanied by a memorandum explaining the provisions of the Bill and their effect on the finances of the country.The discussion on the Budget begins a few days after its presentation. In a democratic set-up.
- The Budget is discussed in two stages in Lok Sabha. First, there is the General Discussion on the Budget as a whole. This lasts for about 4 to 5 days. Only the broad outlines of the Budget and the principles and policies underlying it are discussed at this stage. Consideration of the Demands by Standing Committees of Parliament
- After the first stage of General Discussion on both Railway as well as General Budget is over, the House is adjourned for a fixed period. During this period, the Demands for Grants of various Ministries/Departments including Railways are considered by concerned Standing Committees (Rule 331G)
- On the last day of the allotted days, the Speaker puts all the outstanding Demands to the Vote of the House. This device is popularly known as ‘guillotine’. Lok Sabha has the power to assent to or refuse to give assent to any Demand or even to reduce the amount of Grant sought by Government. In Rajya Sabha there is only a General Discussion on the Budget. It does not vote on the Demands for Grants
- Motions for reduction to various Demands for Grants are made in the form of Cut Motions seeking to reduce the sums sought by Government on grounds of economy or difference of opinion on matters of policy or just in order to voice a grievance.
- The Appropriation Bill is intended to give authority to Government to incur expenditure from and out of the Consolidated Fund of India
- The Finance Bill seeking to give effect to the Government’s taxation proposals which is introduced in Lok Sabha immediately after the presentation of the General Budget, is taken up for consideration and passing after the Appropriation Bill is passed.
- Budget of a State under President’s rule is presented to Lok Sabha. The procedure followed in regard to the Budget of the Union Government is followed in the case of State Budget also with such variations or modifications, as the Speaker may make.