Union Budget

 () Union budget of India

Government	Government of India
Website	www.indiabudget.gov.in
‹ February 2023 February 2024 ›

The Union Budget of India, also referred to as the Annual Financial Statement in Article 112 of the Constitution of India,^[1] is the annual budget of the Republic of India set by Ministry of Finance for the following financial year, with the revenues to be gathered by Department of Revenue to identify planned government spending and expected government revenue and the expenditures gathered by Department of Expenditure of the public sector, to forecast economic conditions in compliance with government policy.

The Government presents it on the first day of February so that it can be materialised before the beginning of new financial year in April. Until 2016 it was presented on the last working day of February by the Finance Minister in Parliament. The budget division of the Department of economic affairs (DEA) in the finance ministry is the nodal body responsible for producing the budget.^[2]

It is presented by means of the Finance bill and the Appropriation bill has to be passed by Lok Sabha before it can come into effect on 1 April, the start of India's financial year.

In modern times, the budget has been broadcast live from Sansad Bhawan on the DD National, DD News and Sansad TV. It is hosted without interruption from 11:00 am to 1:00 pm, normally followed up with a report by a panel assessing the changes, benefits and flaws in the budget. Additional budget documents and materials are available on the government budget website and Union Budget Mobile app.

Rail Budget, presented separately for 92 Years has been merged with union budget.^[3]

Since 1947, there have been a total of 73 annual budgets, 14 interim budgets and four special budgets, or mini-budgets.^[4][5]

Traditions

Time of budget announcement

Until the year 1999, the Union Budget was announced at 5:00 pm on the last working day of the month of February. This practice was inherited from the colonial era. Actual agenda behind this tradition was that, it gives Britishers the time of 11:30 am, a relax time at their location. This clearly shows their colonial era mindset they had left on Indian politicians.Another reason was that until the 1990s, all that budgets seem to do was to raise taxes, a presentation in the evening gave producers and the tax collecting agencies the night to work out the change in prices.

It was Yashwant Sinha, the then Finance Minister of India in the NDA government (led by Bharatiya Janata Party) under Prime Minister Atal Bihari Vajpayee, who changed the ritual by announcing the 1999 Union Budget at 11 am.^[6] The tradition started from 2001.

Date of budget announcement

Also again in 2017, departing from the colonial-era tradition of presenting the Union Budget on the last working day of February the then Minister of Finance (India) Arun Jaitley, in the NDA government (led by Bharatiya Janata Party) of Narendra Modi announced that it will now be presented on 1 February.^[7]

Halwa ceremony

The printing of budget documents starts roughly one week ahead of presenting in the Parliament with a customary 'Halwa ceremony' in which Halwa (a sweet dish) is prepared in large quantities and served to the officers and support staff involved. They remain isolated and stay in the North Block office until the Budget is presented. The halwa is served by the Finance Minister. This ceremony is performed as a part of the Indian tradition of having something sweet before starting an important work.^[8]

Lock-In Period

‘Lock-in’ is a period of a number of days which exists to maintain the secrecy of the Budget. The Halwa ceremony begins the “lock-in” period of finance ministry staff in the Budget Press located in the ministry's headquarters in the North Block. They can emerge only once the Finance Minister completes their Budget speech on 1 February.

Previously, this “lock-in” period – when officials cannot be in contact with the outside world – would be longer. Since 2021, however, the Budget has been presented in a purely digital format, and the lock-in period has gotten shorter.

The basement of North Block houses a printing press that was traditionally used to print budget documents for 40 years from 1980 to 2020. Thereafter, the budget went digital with bare minimum documents printed and the bulk distribution happening via mobile app or on the website.

Going digital also meant that the lock-in period has gotten shorter to just five days from the previous one that lasted up to two weeks.

Briefcase (discontinued)

Until 2018, as a part of tradition, Finance ministers carried the budget in a leather briefcase. The tradition was established by the first Finance minister of India, R. K. Shanmukham Chetty.

• 
  The Finance Minister with the budget briefcase, 2011

Bahi-Khata

On 5 July 2019, Nirmala Sitharaman, broke the above tradition by carrying the budget in a Bahi-Khata.^[10] On 1 February 2021, Finance Minister Nirmala Sitharaman presented the first paperless budget. She took a digital tablet wrapped in a tradition 'bahi-khata' style pouch. It is considered a move to strengthen Prime Minister Narendra Modi's ambitious Digital India mission.

FM called on President at the Rashtrapati Bhavan

As per established tradition, the Finance Minister meet the President at the Rashtrapati Bhavan to get assent from President before heading to the Parliament to present the Union Budget.

Cabinet Meeting in Sansad Bhawan

A meeting of the Union Cabinet is held at 10a.m. on February 1 . After getting the nod from the cabinet, Finance Minister present the Union Budget in Parliament of India.

Post Budget Press Meet

The Union Minister for Finance and Corporate Affairs address a Post Budget Press Conference along with Ministers of State for Finance, Finance Secretary and all the other Secretaries of the Ministry of Finance to address the Media about announcements made during Budget speech and answer the queries

• 
  Union Minister for Finance addressing a Post Budget Press Conference, in New Delhi
• 
  Press Meet at National Media Center New Delhi

Post Budget Meeting

Finance Minister address the Reserve Bank of India's central board of Directors and highlight key points of the Union Budget and highlight key points of the Union Budget, including the fiscal consolidation roadmap and high capital expenditure plan. The finance minister also discuss the announcements made during the budget speech.

It is customary for the finance minister to address the Reserve Bank of India board after the budget.

Interim Budget

An interim budget is not the same as a 'Vote on Account'. While a 'Vote on Account' deals only with the expenditure side of the government's budget. An interim budget is a complete set of accounts, including both expenditure and receipts. An interim budget gives the complete financial statement, very similar to a full budget. While the law does not disqualify the Union government from introducing tax changes, normally during an election year, successive governments have avoided making any major changes in income tax laws during an interim budget.^[11]

Difference between Interim Budget and Union Budget

An interim budget differs from a union budget in that it serves as a temporary financial plan for the government when elections are approaching. This budget seeks parliamentary approval for the government to cover expenses for the remaining months in its term. Unlike a Union budget, which outlines the entire year, an interim budget focuses on the transition period until the new government takes charge. While estimates are provided for the entire year, the incoming government can modify them when formulating a new budget. The interim budget also holds the power to make changes in the tax regime, but historically, major tax adjustments or new schemes are avoided due to the limited time in office. It essentially mirrors the first part of a union budget, detailing the previous year's income and expenses, with only essential expenses documented until the elections. Moreover, regulations from the Election Commission prevent any significant policy changes that could unfairly influence voters during this critical period.^[12]

History Of Budget

Pre-liberalization

The first union budget of independent India was presented by R. K. Shanmukham Chetty on 26 November 1947. Total revenues stood at ₹171.15 crore, and the fiscal deficit was ₹24.59 crore. The total expenditure was estimated at ₹197.29 crore with Defence expenditure at ₹92.74 crore.

The union budgets for the fiscal years 1959–61 to 1963–64, inclusive of the interim budget for 1962–63, were presented by Morarji Desai. On 29 February in 1964 and 1968, he became the only finance minister to present the Union budget on his birthday.^[13] Desai presented budgets that included five annual budgets and an interim budget during his first term and three final budgets and one interim budget in his second tenure when he was both the Finance Minister and the Deputy Prime Minister of India. After Desai's resignation, Indira Gandhi, the then Prime Minister of India, took over the Ministry of Finance to become the first woman to hold the post of the Finance Minister.

Hirubhai M. Patel, presented the shortest budget speech for the interim budget of 1977, which was mere 800 words long.^[14] Pranab Mukherjee, the first Rajya Sabha member to hold the Finance portfolio^{[clarification needed]}, presented the annual budgets for the financial years 1982–83, 1983–84 and 1984–85. Rajiv Gandhi presented the budget for 1987–89, after V. P. Singh quit his government, and in the process became the third Prime Minister to present a budget after his mother and grandfather. N. D. Tiwari presented the budget for 1988–89, S. B. Chavan for 1989–90, while Madhu Dandawate presented the Union budget for 1990–91. Dr. Manmohan Singh became the Finance Minister and presented the interim budget for 1991-92 as elections were forced. Due to political developments, early elections were held in May 1991 following which the Indian National Congress returned to political power and Manmohan Singh, the Finance Minister, presented the budget for 1991–92.

Post-liberalization

Manmohan Singh under P. V. Narasimha Rao, in his next annual budgets from 1992 to 1993, opened the economy,^[15] encouraged foreign investments and reduced peak import duty from 300 plus percent to 50 percent. After elections in 1996, a non-Congress ministry assumed office. Hence the financial budget for 1996-97 was presented by P. Chidambaram, who then belonged to Tamil Maanila Congress. Following a constitutional crisis when the I. K. Gujral Ministry was on its way out, a special session of Parliament was convened just to pass Chidambaram's 1997-98 budget. This budget was passed without a debate. After the general elections in March 1998 that led to the Bharatiya Janata Party forming the Central Government, Yashwant Sinha, the then Finance Minister in this government, presented the interim and final budgets for 1998–99. After general elections in 1999, Sinha again became the Finance Minister and presented four annual budgets from 1999–2000 to 2002–2003. Due to elections in May 2004, an interim budget was presented by Jaswant Singh.

The Union Budget of India for 2012–2013 was presented by Pranab Mukherjee, on 16 March 2012, which was the 7th budget of his career. These budgetary proposals would be applicable for financial year 1 April 2012 to 31 March 2013. The Union Budget of India for 2013–2014 was presented by P. Chidambaram on 28 February 2013. The Interim Union Budget for 2014–2015 was presented on 17 February 2014.^[16] The Union Budget of India for 2014–2019 was presented by Arun Jaitley.^[17][18] The Interim Union Budget for 2019–2020 was presented by Piyush Goyal.^[19] The Union Budget for 2019–2023 was presented by Nirmala Sitharaman.^[20][21]

Finance ministers who have presented the budget

Timeline

Morarji Desai has presented 10 budgets which is the highest count followed by P Chidambaram's 9 and Pranab Mukherjee's 8. Yashwant Sinha, Yashwantrao Chavan and C.D. Deshmukh have presented 7 budgets each while Manmohan Singh and T.T. Krishnamachari have presented 6 budgets, Nirmala Sitharaman has presented 5 budgets.^[4]

Notes:
¹During Deshmukh's tenure the Budget papers were prepared in Hindi as well for the first time.^[22]
2Morarji Desai presented eight annual and two interim budgets.^[22]

List of Union Budgets

See also

• Military budget of India
• Railway budget of India
• Indian Economy

References

External links

• Indian Budget by Ministry of Finance
• Economic Survey and Union Budget
  • List of Budget Speeches (since 1947)