India's Union Budget reflects the goals, difficulties, and socioeconomic priorities of the country in addition to being an annual financial statement. The budget, which is created by the Ministry of Finance's Department of Economic Affairs (DEA) and presented by the Finance Minister, Nirmala Sitharaman, lists the government's projected revenue and outlays for the next fiscal year.
What goes behind crafting the Union Budget?
The budget-making process in India is a meticulous exercise. It combines economic forecasting, detailed planning, strategic policymaking, and many other factors that aim to steer India towards growth and stability.
Laying the groundwork
The budget-making process commences in the third quarter of the financial year. It begins with the finance minister, aided by advisors and bureaucrats, initiating consultations and gathering suggestions from various sectors. This stage involves issuing budget circulars to ministries and departments, collecting data on current and past fiscal years, and estimating future financial needs.
Pre and Post Independent era
Budget-making as we know it today has to be looked at through two different eras – pre-independent when it was to serve the British interests and post-independent. The first-ever Indian Budget in pre-independent India that was presented was by James Wilson who was appointed as the Finance Minister of the India Council that advised the Indian Viceroy. He was a Scottish businessman, acknowledged for his understanding of business and finance and was the founder of the well-known magazine, The Economist, as well as that of the Standard Chartered bank. He was a member of the British Parliament and the Finance Secretary to the UK Treasury as well as the Vice President of the Board of Trade. He presented India’s first Budget on February 18, 1869.
2017 onwards Budget was shifted to Feb 1
The Union Budgets were presented in the evening at 5 so that the details could be also presented to the British Parliament which used to be sitting for its session at the same time. This practice continued till 1998, a full 51 years after independence. From the 1999 Union Budget, the finance minister has presented it at 11am on February 28. 2017 onwards, the date of presentation of the Budget was shifted to February 1.
Some British model ceremonies in the Union Budget:
Halwa ceremony: This ceremony is performed every year before the lock-in process begins for officials involved in budget preparation.
Lock-in ceremony: This ceremony is performed after the Halwa ceremony and marks the beginning of the lock-in period for officials involved in the budget preparation.
Budget speech: The Finance Minister delivers a speech in Parliament, which marks the beginning of the budget presentation.
Printing of budget documents: The budget documents are printed and made available digitally on the Union Budget Mobile App.
Budget presentation: The Finance Minister presents the budget to Parliament.
Review of preparations: The Finance Minister reviews the preparations for the budget presentation.
Tour of the Budget Press: The Finance Minister takes a tour of the Budget Press to review the preparations.
Best wishes to officials: The Finance Minister extends her best wishes to the officials involved in the budget preparation.
Brief history of the budget briefcase:
In 1860, British Chancellor William Ewart Gladstone presented the budget in a red leather briefcase with the Queen's monogram, starting a tradition.
The red colour was chosen for its prominence in the House of Saxe-Coburg-Gotha's coat of arms.
The tradition was adopted in India after independence, with the first finance minister, RK Shanmukham Chetty, carrying a leather portfolio bag for the first budget presentation in 1947.
Over the years, Indian finance ministers used different coloured briefcases, deviating from the traditional red color.
In 2019, Finance Minister Nirmala Sitharaman broke the tradition by carrying a red cloth-wrapped "bahi-khata" (a traditional Indian ledger) instead of a briefcase.
In 2021, Sitharaman presented the budget in a paperless format using a tablet wrapped in a red cloth "bahi-khata" style pouch.
