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Thursday, January 30, 2020

What is the Union Budget?

What is the Union Budget? 

According to Article 112 of the Constitution of India, the Union Budget is the annual financial statement of the estimated receipts and expenditure of the Central government for that particular financial year. The receipts and disbursements are shown under three parts in which the Government Accounts are kept, viz.,

(i) The Consolidated Fund of India,
(ii) The Contingency Fund of India, and
(iii) The Public Account of India.

The finance minister's Budget presentation speech has many parts. They pertain to various categories: Annual Financial Statement (AFS), Demand for Grants (DG), Appropriation Bill, Finance Bill, Macro-economic framework for the relevant financial year, Medium-Term fiscal policy and a strategy statement, Expenditure Profile, Expenditure Budget, Receipts Budget.

Apart from the AFS, the Demands for Grants and Finance Bill are also mandated by Articles 113 and 110(a) of the Constitution of India respectively. The statements mandated under FRBM Act namely Macro-Economic Framework Statement, Fiscal Policy Strategy Statement and Medium Term Fiscal Policy Statement are presented as per the provisions of the Fiscal Responsibility and Budget Management Act, 2003

Who prepares the Budget

A lot of discussions and consultations are held with the finance ministry, NITI Aayog and other spending ministries while preparing the Union Budget. The finance ministry issues the norms for spending and based on this guideline, the ministries put up their demands for the financial year.

The Budget Division of the Department of Economic Affairs in the finance ministry is the nodal body responsible for producing the Budget.

Finance Minister Team

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