Budget System in India
The Indian budget covers both revenue and capital expenditure, and it is divided into two parts: the Union Budget and the Railway Budget. The Union Budget covers the financial requirements of the central government, while the Railway Budget covers the financial requirements of the Indian Railways.
Type Of Budget System in India
In India, there are two types of budget: the Union Budget and the State Budget. The Union Budget, also known as the Central Budget, is presented by the Union Finance Minister in the Parliament and deals with the financial affairs of the Central government, including revenue and expenditure.
The State Budget, on the other hand, is presented by the respective Finance Ministers of each state and deals with the financial affairs of the state government, including revenue and expenditure|
6 Stages of Budget in India
The budget process in India typically involves the following six stages:
- Preparation: The Ministry of Finance, through the Budget Division, initiates the process of budget preparation by issuing a budget circular to all the Ministries/Departments and state governments.
- Demands for Grants: Ministries/Departments and state governments are required to submit their proposals for revenue and capital expenditure, along with the rationale for the same, to the Budget Division.
- Scrutiny of Demands for Grants: The Budget Division and other relevant Ministries/Departments scrutinize the proposals and make recommendations for revisions, if necessary.
- Consolidation and Finalization: The Budget Division consolidates the revised proposals and finalizes the budget estimates for presentation to the Cabinet.
- Presentation of the Budget: The Union Finance Minister presents the budget in the Parliament, outlining the revenue and expenditure estimates for the upcoming financial year.
- Post-Budget Scrutiny: After the budget is presented, it is examined and discussed by the relevant parliamentary committees before being passed into law.
It’s important to note that this process is subject to change and can vary depending on the government.
Budget cycle in India
The budget cycle in India generally takes place annually and follows a specific timeline, with the main stages being:
- Pre-Budget Consultations: The Ministry of Finance holds consultations with various stakeholders, such as industry groups, economists, and state governments, to gather inputs and feedback for the budget.
- Budget Preparation: The Ministry of Finance, through the Budget Division, initiates the process of budget preparation by issuing a budget circular to all the Ministries/Departments and state governments.
- Budget Announcement: The Union Budget is presented by the Union Finance Minister in the Parliament, outlining the revenue and expenditure estimates for the upcoming financial year.
- Post-Budget Scrutiny: After the budget is presented, it is examined and discussed by the relevant parliamentary committees before being passed into law.
- Implementation: The budget is implemented from April 1st of the financial year to March 31st of the next financial year.
- Budget Evaluation: After the end of the financial year, the government evaluates the performance of the budget and makes necessary adjustments for the next year’s budget.
It’s important to note that this process is subject to change and can vary depending on the government.
Budget system in india FAQ
Q. What is the budget system in India?
Ans. The budget system in India is a process by which the government of India presents its annual financial statements, including revenue and expenditure estimates, to the Parliament. The system consists of two types of budget: the Union Budget and the State Budget. The Union Budget, also known as the Central Budget, is presented by the Union Finance Minister in the Parliament and deals with the financial affairs of the Central government, including revenue and expenditure. The State Budget, on the other hand, is presented by the respective Finance Ministers of each state and deals with the financial affairs of the state government, including revenue and expenditure.
Q. How often is the budget presented in India?
Ans. TThe budget is presented annually, typically in the month of February.
Q. Who presents the budget in India?
Ans. TThe Union Budget is presented by the Union Finance Minister in the Parliament. The State Budget is presented by the respective Finance Ministers of each state.
Q. What is the financial year in India?
Ans. TThe financial year in India runs from April 1st to March 31st of the next year.
Q. What is the significance of the budget in India?
Ans. TThe budget is a significant document that lays out the government’s plans and priorities for the upcoming financial year. It also serves as a tool for the government to manage the country’s economy, allocate resources, and implement policies.
Q. What is the budget process in India?
Ans. TThe budget process in India typically involves the following six stages: Preparation, Demands for Grants, Scrutiny of Demands for Grants, Consolidation and Finalization, Presentation of the Budget, Post-Budget Scrutiny.
Q. What happens after the budget is presented in India?
Ans. TAfter the budget is presented, it is examined and discussed by the relevant parliamentary committees before being passed into law. The budget is then implemented from April 1st of the financial year to March 31st of the next financial year. After the end of the financial year, the government evaluates the performance of the budget and makes necessary adjustments for the next year’s budget.
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