Finance minister Nirmala Sitharaman is set to present the Union Budget in the Parliament today. Today’s budget will be the first under the Modi 3.0 government. Breaking the record set by Morarji Desai’s six budget presentations, Sitharaman will become the first Finance Minister to present seven straight budgets with the release of this year’s budget.
Similar to the last few complete Union budgets, Budget 2024 will be distributed electronically. Usually the annual union budget is presented on the last working days of the financial year and came into effect on April 1. But this time we were about to hold general elections, thus on February 1st, an interim union budget for 2024 was announced.
Given the coalition government and the diminished majority of the Modi administration, this year’s budget is expected to have a significant influence. The Finance Minister will surely have a difficult task juggling many demands and pulls in this altered environment. Historically, governments with differing ideological inclinations have chosen to increase social sector spending and implement new welfare schemes.
Expectations from Union Budget 2024
During the budget formation discussions, a team of economists recommended to the ministry that the future budget should prioritize cutting the fiscal deficit in addition to the need to create jobs.
The average middle class salaried people have great expectations from Budget 2024 to give them respite from income taxes and more disposable income in their hands. According to reports, the government may include tax relief measures in the budget, such as increasing the new tax regime’s exemption level to Rs 5 lakh. If put into effect, this policy might raise consumer stocks and spark a market upswing.
But it’s also expected that the Modi 3.0 government will keep up its record-breaking capital expenditure push, with an emphasis on infrastructure.
How is the Budget formulated?
The Ministry of Finance prepares the Annual Budget in consultation with Niti Aayog and other relevant ministries. The Union Budget, also known as the annual financial statement, is prepared by the Department of Economic Affairs in the Ministry of Finance. It is a financial blueprint for the state which describes the estimated government’s revenue and expenditure for the upcoming financial year.
Budgetary circulars are sent by the finance ministry to all relevant ministries at the onset of the budgetary process. The ministries share their revenue, expenses, and projections from the prior year as well as financial requirements of the upcoming year.
Senior officials in respective departments closely review the information and projections given by authorities at the local level. The data and estimates are forwarded to the relevant ministries for additional review after they have been authorized or, if needed, updated. After data authentication and through analysis, the finance ministry allocates revenue for upcoming disbursement.
Pre-budget discussions are a usual means for the finance ministry to obtain feedback from a variety of stakeholders about their demands and opinions. These stakeholders include state leaders, agriculturists, bankers, economists, and labor organizations. The Department of Economic Affairs and Revenue engages with various stakeholders such as farmers and small business owners to gain better insights and an efficient budget.
On an annual basis, the government organizes a halwa ceremony a few days before unveiling the budget. The printing of Budget documents will begin following this event.
The budget is put forward in the Lok Sabha by the honorable finance minister as the last phase in the budget-making process. The Budget is then given for discussion to the Upper house of the parliament, Rajya Sabha. After the budget has been approved by both chambers, it is sent to the president for the stamp of approval.
