How is the Budget prepared: Insights and expectations for this year
Initiating the Budget Cycle
The Budget-making process typically commences around August-September of the preceding year, roughly six months before its presentation on February 1. This timeline allows ample room for meticulous planning and consultations to ensure a comprehensive financial blueprint for the upcoming fiscal year.
Definition and Framework
As per Article 112 of the Constitution of India, the Union Budget serves as a formal statement presenting the government's anticipated revenues and expenditures for the fiscal year. It is a crucial policy document that outlines the financial priorities and allocations aimed at steering the country's economic trajectory.
Steps in Budget Preparation
Circular Issuance:
The MoF issues a circular to all ministries, states, Union territories, and autonomous bodies outlining the guidelines and formats for estimating expenditures and revenues. This circular sets the groundwork for the entire budgeting exercise, ensuring consistency and adherence to financial norms.
Revenue and Expenditure Estimates:
Detailed estimates of revenue and expenditure are compiled and scrutinized by the finance ministry. These estimates are crucial in determining the overall budget deficit, which represents the gap between government spending and income. The Chief Economic Advisor (CEA) plays a pivotal role in advising on the fiscal measures needed to achieve fiscal prudence while meeting developmental goals.
Allocation Decision:
Based on the revenue projections and expenditure estimates,
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