Is Budget 2024 Really Going to Have 2 Budgets This Year?

Finance Minister Nirmala Sitharaman is gearing up to unveil her sixth budget on February 1.

Since this year marks an election year, finance minister will present an interim budget,

also known as a "vote-on-account." The purpose of this interim budget is to

address the immediate financial requirements of the government until a new cabinet is formed

following the Lok Sabha elections in 2024. A comprehensive budget is anticipated to be presented once the new government assumes office after the elections.

What is an interim budget?

An interim budget serves as a financial declaration put forth by the government in the context of an election year or during a transitional phase when the presentation of a complete budget is not practical. It functions as a temporary financial plan to manage the government's expenses until a newly elected government is in place and can present a comprehensive budget.

What is the difference between an interim budget and a regular budget?

An interim budget is commonly delivered by the outgoing government, prioritizing crucial expenditures and maintaining policy continuity. Generally, it refrains from introducing significant policy alterations or new initiatives, as it is designed as a caretaker budget.

In contrast, a regular budget is an all-encompassing financial blueprint presented each year.

It delineates the government's anticipated revenue, planned expenditures, and policy initiatives for the upcoming fiscal year.

Budget Is Presented Twice In Election Years

During election years, two budgets are being presented, such as this year, 2024. Firstly an interim budget is presented on February 1st, which shows the govt’s projected spending and revenue for the next few months. The final budget for the remaining financial year is presented by the newly elected government after the election results. It is expected to be presented in July.

Budget 2024: Step-By-Step Process Of How The Union Budget Is Prepared.

Have you ever wondered how the entire budget preparation process is done?

From its initial phase to the final step, the process involves various stages. Continue reading as we break down the budget-making process to provide you with insights into the series of steps undertaken by the Finance Ministry when crafting the national union budget."

5 Step Process Of Union Budget Preparation

1. Pre-Budget Preparation

2. Data Collection, Review & Estimates Projection

3. Discussion with Prime Minister and public domains

4. Halwa ceremony

5. Presentation of Budget

1.Pre-Budget Preparations

Budget preparation starts prior 6 months of its presentation.

FM Issues a circular to the various ministries eg. food ministry, defense ministry, railway ministry etc.

They are asked to submit their estimates in terms of financial requirements for the upcoming fiscal year as well as expenditure and receipts for the previous and current fiscal years.

2. Data Collection, Review & Estimates Projection

Information and projections collected is reviewed by the senior officials and additional reviews are done by top officials.

They may change or alter the information if needed. and then it is submitted to Finance Ministry. They undergo a

comprehensive analysis and comparison with the current economic conditions and the resources at hand to determine

their feasibility.

3. Discussion with Prime Minister and public domains:

-The Finance Ministry creates new public welfare programs and distributes revenues to other administrative ministries

following careful analysis.

-In instances of disputes regarding resource allocation, the Finance Ministry seeks guidance

from either the Prime Minister or the Union Cabinet, and their decision is ultimately final.

-The Finance Ministry also prepares the report on the expected revenues to be generated in the upcoming fiscal year with

the Central Board of Direct Taxes and the Central Board of Excise and Customs once the funds are set aside for

future expenditures.

-To ensure an effective budget and gathering all the information, the Finance Ministry engages

with stakeholders from the public domain, including farmers and small business owners, throughout this procedure."

4. Halwa ceremony

It is a final stage for preparation of the Budget. A Halwa Ceremony. Before initiating printing of the budget this halwa

ceremony is conducted and it is attended by the finance minister and other high-ranking officials. To maintain confidentiality, those involved in

the budget creation process, including officials and staff members, are exclusively restricted to the ministry's

premises during this phase and are prohibited from external interactions."

After the preparation and distribution of halwa to the entire staff involved in the budget-making process,

these officials and support staff are required to stay in the North Block until the Budget is presented in Parliament.

It is officially the start of the "lock-in" period of the Budget.

This is done particularly to maintain the confidentiality of budget-related information and prevent any leaks

before the official presentation.

5. Presentation of Budget.

Union Budget is presented by the Finance Minister In Parliament on February 1 at 11 am.

Budget 2024, which will be an Interim Budget, will be presented in the Parliament on February 1 at 11 am.

Why the budget presented on February 1?

Former Finance Minister Arun Jaitley stated that to discontinue

the 92-year-old tradition adopted during the colonial era, the budget would be presented on February 1 instead of the last day of the month. He mentioned that traditionally, the budget used to be presented at the end of February. In this way, the government had very little time to prepare for new policies effective from April.

To address this, the date was changed to February 1 to allow more time for the effective formulation of new policies, starting from April."

Interim Budget: Where to watch

For news and insights on the Budget 2024, you can follow and subscribe to my channel.

We will be sharing each and every point of the budget in easy and an understandable manner.

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Disclaimer:- The opinions presented are exclusively those of the author CA Pratibha Varia. The material in this piece is intended purely for informational purposes and for individual, non-commercial consumption. It does not constitute expert guidance or an endorsement by any organization. The author, the organization, and its associates are not liable for any form of loss or harm resulting from the information in this article, nor for any decisions made based on it. Furthermore, no segment of this article or newsletter should be employed for any intention unless granted in written form, and we maintain the legal right to address any unauthorized utilization of our article or newsletter.