The Making of Union Budget 2024-25: Steps and Insights

In a few weeks from now, Finance Minister Nirmala Sitharaman is set to present the Union Budget for the fiscal year 2024-25 in the Lok Sabha on July 23. This marks the first budget for NDA's third term, and expectations are high. Sitharaman will also become the first finance minister to deliver seven consecutive Union Budgets, eclipsing Morarji Desai's record of six. 

FM Sitharaman recently concluded pre-budget consultations with over 120 stakeholders from June 19 to July 5, as part of the budget preparation process by the Budget division of the Department of Economic Affairs (DEA). To better understand this process, let's delve into the five critical stages involved in the formation of the Union Budget.

Preparing the Union Budget: The Initial Phase

This annual budget outlines the government's projected income and expenses for the year ahead. The process of creating the Union Budget begins about six months prior to its presentation in Parliament. It kicks off with the Ministry of Finance issuing budget circulars to all departments, laying down the guidelines and requirements for the upcoming fiscal year. These circulars are vital for departments to prepare their financial reports, detailing expenditures, receipts, and financial needs for the next year.

Data Accumulation and Authorization

Once the initial data collection is completed, departmental heads review and approve the financial estimates. These estimates are then scrutinized by higher authorities within the respective ministries and finally by the Finance Ministry. This step ensures that the budget aligns with the current economic conditions and available resources.

Crafting the Budget Document

The Finance Ministry plays a pivotal role in shaping the final budget. This includes allocating funds across ministries and proposing new public welfare schemes. Disagreements over resource allocation are sometimes escalated to the Union Cabinet or the Prime Minister for a final decision. Additionally, the Finance Ministry collaborates with the Central Board of Direct Taxes and the Central Board of Excise and Customs to forecast the next year's revenue.

In the concluding phase, all gathered reports are merged to craft the final Union Budget. Throughout this phase, various Finance Ministry departments engage with public stakeholders like farmers and small business owners. This engagement helps to incorporate diverse insights, ensuring the budget is both comprehensive and effective.

The Halwa Ceremony and Budget Printing

The budget printing process is preceded by the traditional 'halwa ceremony,' where the Finance Minister and staff involved in budget preparation eat halwa (a traditional Indian dessert), marking the beginning of the printing phase. This period is crucial as all officials involved are sequestered within the ministry to maintain the confidentiality of the budget details.

Presentation in Parliament

After the entire preparation process, the Finance Minister presents the Union Budget in Parliament. Traditionally, the presentation has occurred on February 1 for the last several years. In election years, the budget process involves two presentations. Initially, an interim budget or vote on account—which provides a financial estimate for the next two to four months—is presented. Following the elections, the newly elected government presents the final budget for the remainder of the fiscal year.

Union Budget 2024-25: Where to Watch

The budget speech will be aired live on the official channels of Parliament, Sansad TV and Doordarshan, and on their respective YouTube channels. Additionally, the Union Budget Web Portal (www.indiabudget.gov.in), available in both English and Hindi, offers digital access to the Budget 2024 documents. This includes important budget documents like the annual financial statement, demand for grants, and finance bills as required by the Constitution.

Live Coverage of the Budget on Liquide

To navigate through the market's volatility on this crucial day, make sure to connect with the Liquide App. We promise exclusive, unmatched coverage of the 2024-25 Budget, providing real-time updates, thorough analysis, and valuable trading insights. Download it today from the Google Play Store or Apple App Store and begin your journey towards informed and successful investing.