Budgetary Procedure

Budgetary procedure refers to the system through which the budget is prepared, enacted and executed.

Preparation of the Budget

 The Ministry of Finance prepares the Central Budget every year. At the state level the finance department is responsible for the Annual State Budget. While preparing the budget, the following factors are taken into account:

• The macro-economic targets to be achieved within a plan period;
• The basic strategy of the budget;
• The financial requirements of different projects;
• Estimates of the revenue expenditures (includes defence expenditure, subsidy, interest payment on debt etc.);
• Estimates of the capital expenditures (includes development of railways, roadways, irrigations etc.);
• Estimates of revenue receipts from tax and non-tax revenues;
• Estimates of capital receipts from the recovery of loans, disinvestment of public sector units, market borrowings etc.
• Estimates of the gap between revenue receipts and revenue expenditure; and
• Estimates of fiscal deficit, primary deficit, and revenue deficit.

Presentation of the Budget

• The hon’ble Minister of Finance, on behalf of the Central Government, places the Union Budget before Parliament on the eve of a new financial year. Similarly at state levels, the Hon’ble Finance Minister of the respective State Government places the State Budget before the State Legislature.
• According to the Indian Constitution, all money bills must be initiated in the Lower House. All the money bills are first placed before the Lok Sabha at the Centre, and before the Legislative Assembly at the State level. The demands of various tax proposals are included in the budget. After the finance bill is passed, an appropriation bill is presented to give legal effect to the voted demands, and to authorise the expenditure as per the budget. In this way, the budgets are enacted in India.

Execution of the Budget

• The budget is mainly executed by different departments of the Government. Proper execution of the budgetary provisions are important for the efficient utilisation of the allocated funds. Parliamentary Control over the Budget In India, the Government Accounts are maintained in three parts:

1. Consolidated Fund
2. Contingency Fund
3. Public Accounts

There are also two committees of Parliament, viz,

1. The Public Accounts Committee, and
2. The Estimates Committee. These committees keep a constant vigil on the expenditure so that no Ministry or Department exceeds the amount sanctioned to it.