Question

Explain briefly various steps involved in the budgetary procedure.

Explain the budgetary procedures followed in India.

Answer 1

The budgetary procedure is the systematic process by which the Union Budget of India is prepared, presented, passed, and implemented. 

1. Preparation of the Budget
   1. The procedure begins approximately 6-8 months before the start of the fiscal year (April 1^st).
   2. The Ministry of Finance sends circulars to all ministries, departments, and autonomous entities requesting financial estimates.
   3. Each ministry produces and submits expenditure and revenue estimates to the Ministry of Finance.
   4. After debates and adjustments, the Finance Ministry approves the budget plans.
2. Presentation of the Budget in Parliament
   1. The Finance Minister normally presents the budget on February 1 of each year.
   2. The presentation has two parts:
      • Annual Financial Statement (the major budget document).
      • Finance Bills (proposed tax reforms).
   3. The budget speech normally consists of two parts:
      • Part A addresses general economic policies.
      • Part B: Tax suggestions.
3. General Discussion
   1. Following the presentation of the budget, both chambers of Parliament (Lok Sabha and Rajya Sabha) hold a broad discussion.
   2. Members examine general budget policy and its economic effects.
   3. There is no voting at this level.
4. Scrutiny by Departmental Standing Committees
   1. The budget is referred to the Departmental Standing Committees.
   2. Each committee investigates the demands for grants (money requirements) from specific ministries.
   3. Committees submit reports to Parliament.
5. Voting on Demands for Grants
   1. The Lok Sabha (lower house) votes on each ministry's request for funds.
   2. The Rajya Sabha can only consider the demands, not vote on them.
   3. If the demands are approved, they become part of the budget.
6. Passing of Appropriation Bill
   1. Following the vote, the administration introduces the Appropriations Bill.
   2. It authorizes the government to draw money from the Consolidated Fund of India to cover the expenses.
   3. The bill must be approved by both houses.
7. Passing of Finance Bill
   1. The Finance Bill includes all tax proposals (such as income tax modifications and new taxes).
   2. It must be passed within 75 days of being introduced.
   3. It fulfils the budget's tax recommendations.
8. Implementation of the Budget
   1. After the measures are passed, the government will begin implementing the budget on April 1^st.
   2. Ministries and agencies begin spending within their authorised budgets.
   3. Monitoring and auditing are performed by institutions such as the Comptroller and Auditor General (CAG).