The Narendra Modi government is expected to present its final budget on February 1, 2019 ahead of the upcoming Lok Sabha elections. 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.
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
# ‘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.
# 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
What is interim budget and why is it different ?
A national interim Budget refers to the budget of a government that is going through a transition period. These budgets are common in democracies where one political party or a coalition is voted out and another political party or a coalition is voted into office. The two governments often have different fiscal plans, so the old government budget is cut short and a new budget is created. The interim Budget helps span the transition time between the two governments so that the government can continue to function.
The government of India has authority to announce new sops in this year's interim budget as model code of conduct has not come into force. The constitute does not allow ruling dispensation to announce new policies if the model code of conduct has come inito force. So, the government at the centre has the leeway to offer some sops in order to win people's support.
Highlights of Union Budget 2018
1. MSP for all unannounced kharif crops will be one and half times of their production cost like majority of rabi crops: Institutional Farm Credit raised to 11 lakh crore in 2018-19 from 8.5 lakh crore in 2014-15.
2. “Operation Greens” launched to address price fluctuations in potato, tomato and onion for benefit of farmers and consumers.
3. Higher targets for Ujjwala, Saubhagya and Swachh Mission to cater to lower and middle class in providing free LPG connections, electricity and toilets.
4. World’s largest Health Protection Scheme covering over 10 crore poor and vulnerable families launched with a family limit upto 5 lakh rupees for secondary and tertiary treatment.
5. Fiscal Deficit pegged at 3.5 %, projected at 3.3 % for 2018-19.