The Union Budget of India is the comprehensive annual financial statement of the Central government that comprises details of their capital, revenue, and expenditures.
For the fifth time, Sitharaman will propose the Union budget. Her Union budget speech in 2022 lasted almost 1.5 hours, while her 2021 speech was 2 hours and 40 minute long and set a record for length in Indian history.
A new digital competition law will be proposed by the government for the fiscal year 2023. Additionally, discussions are ongoing with regard to changes to the 2013 Companies Act and the Insolvency and Bankruptcy Code (IBC). The Competition Act, IBC, and Companies Act are all being implemented by the ministry, and this year is expected to see changes to these laws.
A stronger policy push toward renewable and green energy is anticipated.
This will be the final full Budget of the Modi 2.0 government before the 2024 Lok Sabha general elections. So why is this Budget important, what can an average Indian expect, and what is the process of preparing a Budget for the country's 140 crore people?
Here are a few questions and their answers prepared by the Quint:
When will the budget be presented?
The Union Budget 2023 will be presented in the Lok Sabha at 11:00 am on 1 February. Meanwhile, the Budget Session of Parliament will commence on 31 January and is likely to conclude on 6 April, with a recess scheduled from 14 February till 12 March.
Until 2016, the Budget was presented on the last day of February. But since then, it is being presented on 1 February.
What is the Union budget?
According to Article 112 of the Indian Constitution, the Union Budget is a statement of the estimated receipts and expenditure of the Government of India.
In other words, it is a detailed, comprehensive statement on how much money the government plans to spend on various sectors such as healthcare, infrastructure, agriculture, education and job creation, among others, and how much money it aims to make through direct taxes, such as income tax, and indirect taxes, such as VAT (Value Added Tax) and GST (Goods and Services Tax).
The word 'budget' is derived from the old French word bougette, which means a leather bag, similar to a pouch or wallet.
When does the Government start preparing the Budget?
The finance ministry started the exercise of preparing Union Budget 2023 on 10 October 2022. For this, the ministry consults with the NITI Aayog, the Central government's public policy think tank and the nodal agency tasked with catalysing economic development.
How is the Budget prepared?
The finance ministry issues a circular to all other ministries, states, and Union Territories, asking them to lay out their revenues and expenditures in the past financial year and a blueprint of estimates for the coming year.
Next, the revenue secretary scrutinises these proposals after examining all aspects. Once the data is approved, it is sent to the finance ministry.
The finance ministry then checks the overall estimate of revenue and expenditure to determine the overall budget deficit. The Centre consults the Chief Economic Advisor to determine the optimal amount of borrowing that the government needs to meet that deficit.
After all consultations, the finance ministry allocates funds to other ministries for future expenditures. In case of any disagreement over revenue allocations, the finance ministry consults with the prime minister or the Union Cabinet.
After the funds are allocated, the finance ministers holds several pre-Budget meetings with various stakeholders and industry experts to get a better understanding of their demands.
Following the meeting, the finance minister meets the prime minister and takes a final call on the demands of various stakeholders.
What is the halwa ceremony?
The halwa ceremony is observed to mark the final process of preparing the Union Budget. Halwa, a popular Indian sweet, is served to the entire staff of the finance ministry, after which, the printing process of the Budget documents begins. It is organised at the finance ministry headquarters in the North Block basement in the national capital – which also houses a special printing press.