Budget 2023: Preparation of the Union Budget takes months of planning and execution. The budget-making process starts in August-September, that is, about six months prior to its date of presentation. After the presentation, the Budget has to be passed by both Houses of Parliament before the beginning of the financial year, that is, April 1.

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The Indian Union Budget is prepared by the Ministry of Finance in consultation with Niti Aayog and other concerned ministries. Also, the Budget division of the Department of Economic Affairs (DEA) in the Finance Ministry is the nodal body responsible for producing the Budget.

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5. Estimate of deficit:

- The finance ministry then compares the estimates of revenue and expenditure. 

- This provides the first estimate of the expected lack of revenue to meet projected expenditure. 

- The government then, in consultation with the Chief Economic Advisor, decides on the optimum level of borrowings to meet this deficit. 

6. Narrowing the deficit 

- After the targets for the fiscal deficits and the overall budget deficit is decided, any remaining shortage is filled through a revision in tax rates if feasible, keeping in mind the fiscal incentive structure the government wishes to put in place to stimulate the growth in different sectors. 

- Following the initial plans, if any changes need to be made adjustments are made to the expenditure; usually the plan expenditure has to be modified. 

- Due to the political sensitivities involved in reducing subsidies, non-plan expenditure of the government is inflexible about changing and it is the planned expenditures that are adjusted.

7. Allocating Revenue

The finance ministry, after going through all recommendations, allocates revenues to various departments for their future expenditures.

8. Pre- Budget Meeting

The finance minister then holds pre-Budget meetings with various stakeholders to know about their proposals and demands. These stakeholders include state representatives, bankers, agriculturists, economists, and trade unions.

9. Final Call on demands 

Once the pre-Budget consultations are done, the finance minister takes the final call on demands and it is also discussed with the Prime Minister before finalisation.

10. Budget presentation

Finally, the Union Budget is presented in the Lok Sabha by the Finance Minister. 

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