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Introduction

The budgetary process is a crucial aspect of India's parliamentary system, providing the framework for the government's financial plans and allocations. In this article, we delve into the intricacies of the budgetary process in the Indian Parliament, shedding light on its constitutional foundations, the preparation and enactment stages, execution, and parliamentary control. By understanding this process, we gain valuable insights into how the Indian government manages its fiscal resources to meet the nation's diverse needs.

Constitutional Basis of the Budget


Concept Budget:

  • The budget is referred to in the Constitution as the "annual financial statement."
  • Article 112 of the Constitution addresses the 'annual financial statement,' commonly known as the budget.
  • The President, as per Article 112, submits the budget to the Lok Sabha.
  • The budget encompasses the expected receipts and expenditures for a fiscal year.

Preparation of the Budget


Budget Making Process in Parliament:

  • The Finance Minister presents the budget to Parliament during the Budget Session, usually held in February.
  • Important documents presented alongside the Union Budget:
    • The Annual Financial Statement: Summarizes government expenditure and receipts.
    • Budget at a Glance: Provides a brief overview of the budget.
    • Expenditure Budget: Details expenditure for various ministries and departments.
    • Receipts Budget: Outlines the tax and non-tax funding plan for the government.
    • Finance Bill: Specifies changes to existing tax laws.
    • Medium Term Fiscal Strategy Document: Establishes three-year rolling targets for fiscal indicators.

Enactment of the Budget


Stages in Enactment:

  • The Finance Minister presents the budget in the Lok Sabha, while a copy is placed on the Rajya Sabha's table.
  • Members of Parliament receive printed copies of the budget for detailed review.
  • The Finance Bill, which includes proposals for new taxes or changes to existing taxes, is introduced.
  • Revenue and expenditure proposals are actively debated, with members participating in the discussions.
  • Grant requests for expenditure estimates are presented alongside the budget.
  • Various types of cut motions may be proposed to scrutinize and pressure the government.
  • Different types of demands for grants, such as Vote on Credit, Vote on Accounts, Supplementary grants, and Excess grants, are presented.
  • The Appropriation Bill is introduced, debated, and passed, providing the legal basis for fund withdrawal.
  • The Finance Bill is debated and passed, with provisions for adjustments proposed by members.
  • The Rajya Sabha reviews the bills before returning them to the Lok Sabha.
  • The Finance Bill is signed by the President, becoming a statute without the power of veto.

Execution of the Budget


Implementation of the Budget:

  • The budget's execution commences upon the passage of the finance and appropriation bills.
  • The Revenue Department of the Ministry of Finance oversees fund collection and expenditure.
  • Ministries are granted the authority to draw and spend funds, with the ministry's secretary serving as the principal accounting authority.
  • Accounts are compiled following established procedures and audited by the Comptroller and Auditor General of India.

Parliamentary Control over Finance


Sovereignty of Parliament:

  • The Finance Bill and the Appropriation Bill are presented, debated, and passed under parliamentary rules.
  • Parliament grants requests from the executive, including grants, supplementary grants, and additional grants.
  • The Lok Sabha can accept, reject, or reduce the sum demanded in grant requests.
  • Grant requests are presented by ministers of relevant departments, and a general budget debate occurs in the Lok Sabha.
  • The Constitution allows for grants to cover unanticipated demands on national resources.
  • Such grants require the passage of an Appropriation Act and may address specific purposes, such as wartime requirements.

The Importance of Budgeting


Need of a Budget:

  • Budgeting ensures the effective distribution of limited resources across governmental operations.
  • Prudent expenditure and accurate revenue forecasting are essential for fiscal stability.
  • The budget plays a pivotal role in maintaining a healthy public finance system.

Conclusion

The budgetary process in the Indian Parliament provides the structure for managing the nation's finances. By understanding the constitutional basis, preparation and enactment stages, execution, and parliamentary control, we gain insight into how the Indian government carefully plans and allocates its fiscal resources. The budget's successful implementation and coordination are vital for India's long-term growth and development. The annual financial statement, also known as the budget, serves as a crucial tool for shaping the country's future.

The document Budgetary Process | Public Administration Optional for UPSC (Notes) is a part of the UPSC Course Public Administration Optional for UPSC (Notes).
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