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What is Union Budget: Here’s all you need to know

The budget this time around will be the biggest economic event of the year, which is going to be Narendra Modi government’s fifth and final full fledged budget of its present term in office.

Written by: Nidhi Taneja, New Delhi [ Updated: January 28, 2018 16:11 IST ]
File picture
Image Source : PTI File picture

All eyes will be on Union Finance Minister Arun Jaitley when he walks up to the Parliament with a briefcase on February 1 on the big day to present Union Budget 2018-19.

Interestingly, the tradition of carrying a briefcase dates back to 1947 when RK Shanmukham Chetty, the then Finance Minister, presented Independent India’s first ever budget on November 26. And the practice has been carried forward by all his successors since then. 

This trademark bag comprises of crucial documents that guide the future of the country’s economy.

India Tv - India's first Finance Minister, RK Shanmukham Chetty, carrying a trademark budget bag in 1947

India's first Finance Minister, RK Shanmukham Chetty, carrying a trademark budget bag in 1947

The budget this time around will be the biggest economic event of the year, which is going to be Narendra Modi government’s fifth and final full fledged budget of its present term in office.

No doubt, the budget roll out on the first day of February, has all the potential to emerge as a game changer in view of the saffron party’s publicly stated objective of retaining power in 2019 parliamentary elections.

With sky high hopes, the middle class is looking to get some relief and expects the Finance Minister to increase personal tax exemption limit and tweak tax slabs.

What is Union Budget? 

# Enlisting government’s income and expenditure, the Budget contains the most elaborate account of the Government presented before the Parliament every year.

# The Central government is constitutionally bound to lay down this extensive statement, also referred to as the ‘Annual Financial report’ as per Article 112 of the Constitution of India.

# Classified into Revenue Budget and Capital, it gives the account of the government’s finances for the fiscal year that runs from 1st April to 31st March.

# The Annual Budget is prepared by the Budget Division of Department of Economic Affairs (DEA) headed by the Joint Secretary (Budget) of the Ministry of Finance.

# To start the process, the Budget Division issues an Annual Budget circular every year. This Annual Budget Circular contains detailed instructions for the Union Government Ministries/Departments relating to the form and content of the Statement of Budget Estimates to be prepared.

Also read: Railway Budget 2018: All you need to know

Budget Exercise

# ‘Halwa Ceremony’, a ritual that marks the commencement of printing process of the budget documents took place on January 20.  It was attended by Finance Minister Arun Jaitley, Minister of State for Finance, Shiv Pratap Shukla, Finance Secretary Hasmukh Adhia among other notable dignitaries.

India Tv - Budget 2018 The ritual ‘Halwa Ceremony’ was attended by Finance Minister Arun Jaitley, Minister of State for Finance, Shiv Pratap Shukla, Finance Secretary Hasmukh Adhia and other officials on January 20.

Budget 2018 The ritual ‘Halwa Ceremony’ was attended by Finance Minister Arun Jaitley, Minister of State for Finance, Shiv Pratap Shukla, Finance Secretary Hasmukh Adhia and other officials on January 20.

# There is also a “lock-in” of the officials involved in making the budget. Budget Press in North Block houses them in the period leading up to the presentation of Union Budget in Parliament by the Finance Minister. The custom may sound quirky to many but it is only to maintain secrecy of the budget details.

These officers will be allowed to get in touch with their near and dear ones only after the presentation of Budget on February 1.

# The crucial session beginning January 29 will commence with President Ramnath Kovind making a joint address of both the houses of the Parliament, following which the Economic Survey will also be tabled.

# Two days after, the final showdown will be witnessed with Finance Minister Arun Jaitley laying down on the table the much awaited budget on February 1.

Also Read: Union Budget 2018: From tax rebate to safeguarding women’s interests, here’s what the nation expects from Arun Jaitley

Important documents to be presented before Parliament

 Besides the Budget speech, following documents are required to be presented before the Parliament:

1.    Annual Financial Statement (AFS)

2.    Demand for Grants (DG)

3.    Appropriation Bill

4.    Finance Bill

5.    Memorandum explaining the provisions in the Finance Bill, 2015

6.    Macro-economic framework for the relevant financial year

7.    Fiscal policy strategy statement for the financial year

8.    Medium term fiscal policy statement

9.    Expenditure profile

10.  Expenditure budget

11.  Receipts budget

Highlights of Union Budget 2017

# Union Budget and Railway Budget were merged last year in a first-of-its kind move, on the basis of recommendations of the Committee headed by Bibek Debroy, Member, NITI Aayog and a separate paper on ‘Dispensing with the Railway Budget’ by him along with Kishore Desai. 

# In 2017, the practice of presenting the budget on last working day of February, was also done away with, giving way for it be tabled on the first day of the month. Scrapping the colonial-era tradition, Jaitley had for the first time presented the annual accounts on February 1, last year. This was done to give more time to departments to spend the money allocated to them.

India Tv - File photo-Finance Minister Arun Jaitley tabling the Union Budget for 2017-18 in the Parliament in New Delhi.

Image Source : PTIFile photo-Finance Minister Arun Jaitley tabling the Union Budget for 2017-18 in the Parliament in New Delhi.

Present Scenario

Gearing up for the day, the Government is holding meetings with economists and eminent personalities among other concerned officials.

Prime Minister Narendra Modi held deliberations with over 40 economists and other experts at an interactive session, organized by NITI Aayog, on the theme “Economic Policy – The Road Ahead.”

India Tv - PM Modi interacting with leading economists and sectoral experts on finding ways to double income of farmers, on January 10

PM Modi interacting with leading economists and sectoral experts on finding ways to double income of farmers, on January 10

During the session, participants shared their views on various economic themes such as the macro-economy, agriculture and rural development, employment, health and education, manufacturing and exports, urban development, infrastructure and connectivity.

Union Finance Minister Arun Jaitley too held a host of meetings, including a significant one with the Chairman and members of the 15th Finance Commission.

He also addressed a pre-budget consultative meeting with States' Finance Ministers on January 18, followed by the 25th GST Council Meeting.

India Tv - Finance Minister Arun Jaitley at a pre budget consultative meeting with States' Finance Ministers on January 18

Finance Minister Arun Jaitley at a pre budget consultative meeting with States' Finance Ministers on January 18

India Tv - Finance Minister Arun Jaitley chairing 25th GST Council meeting in New Delhi on January 18

Finance Minister Arun Jaitley chairing 25th GST Council meeting in New Delhi on January 18

The first phase of the budget session will begin on January 29 spanning up to February 9 while the second half will go on from March 5 to April 6.

Will the budget be populist or reformist? Wait and watch this space.

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