The budget for the Year 2024 is set to be presented on February 1, 2024. Have you ever wondered about the process of preparing the budget and the factors influencing it? Here's the breakdown.

How is the Budget Prepared: Consultation

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

Before the budget is presented, the Finance Minister of India engages in discussions with stakeholders from various sectors, including the revenue department, industry associations, chambers of commerce, farmers' associations, trade associations, and economists. Ministries, both at the state and central levels, as well as self-interest groups and defence forces, actively participate in the early stages of budget preparation, submitting their inputs to the budget division of the Department of Economic Affairs (DAE). The finance ministry, NITI Aayog, and other ministries play a significant role in shaping the budget.

What is the contribution of people in the budget?

In the budget-making process, the Ministry of Finance also seeks suggestions from industries, corporations, and the common man. After reviewing different suggestions, the budget document is prepared after a meeting with the finance ministry officers. A team of about 100 people works on the budget-making process. These people have to stay at the headquarters of the Ministry of Finance right from 10 days till the budget is presented. The budget also requires the government to consider measures to reduce the target of fiscal deficit.

Blueprint of budget

In the circular, they are asked to give the necessary amount by estimating their expenses for the upcoming financial year. After this, there is a discussion between different departments on allocating the amount. There is also a discussion on how much money should be allocated to which department. The Finance Ministry prepares a blueprint by holding a meeting with other ministries. In meetings, senior officers of all the ministries discuss with the Ministry of Finance fund allocation.

What is the purpose of the budget?

As we know, major sources of government income include taxes and revenue, government fees, fines, dividends, interest on loans given, etc. It is important to understand what the purpose of the government's budget is.

  • Releasing funds for different schemes by increasing income sources.
  • Creating plans to boost the country's economic growth rate.
  • Developing strategies to reduce poverty and unemployment, improving the economic condition of citizens.
  • Allocating funds for infrastructure construction in sectors like railways, electricity, and roads.