Union finance minister Nirmala Sitharaman will present Budget 2020 on Saturday. This will be Sitharaman's second budget as finance minister.
Sitharaman had presented the first full Budget of the Narendra Modi government in July last year. Sitharaman is the first full-time woman finance minister of India. Before her, former prime minister Indira Gandhi was the only woman who presented the Union Budget. That was in February 1970.
From 2017, the Union Budget is presented on 1 February replacing the previous practice of presenting it on the last day of February every year.
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.
Apart from this, the government will consult with various stakeholders like state representatives, bankers, agriculture experts, economists and trade unions to get a feedback.
How is the Budget presented?
The Secretary-General of the Lok Sabha Secretariat seeks approval of the President of India after the Speaker agrees to the date suggested by the government. The finance minister presents the Budget in the Lok Sabha outlining key estimates and proposals. The finance minister briefs the Union Cabinet on the Budget proposals through a 'summary for the cabinet' just before the Budget is presented. The Budget is tabled in the Parliament after the finance minister's speech.
The Railway Budget was merged with the General Budget in 2017 thus putting an end to a 92-year-old practice of presenting a separate rail and general budgets. The Rail Budget was separated from the General Budget in 1924. The last Railway Budget was presented on 25 February 2016 by then railway minister Suresh Prabhu.
Since 2017, the Budget of the Ministry of Railways and the Demands for Grants relating to railway expenditure are presented in Parliament together with the Union Budget from the financial year 2017-18 onwards. The total receipts and expenditure of the Railways are, incorporated in the Annual Financial Statement of the Government of India.
The decision to merge the railway budget with General Budget was taken along with advancing the date of the Union Budget in the Parliament under the process of budgetary reforms taken up by the government.
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Updated Date: Jan 31, 2020 10:49:18 IST