Union budget of India

The Union Budget of India, also known as the Annual Financial Statement under Article 112 of the Indian Constitution, is the country's annual financial plan prepared by the Ministry of Finance. It outlines the government's expected revenues, collected by the Department of Revenue, and planned expenditures, managed by the Department of Expenditure. The budget serves as a financial blueprint for the upcoming fiscal year, forecasting economic conditions and aligning the Government of India's spending with its policy objectives.

The Government of India presents the Union Budget on the first day of February to ensure its implementation before the commencement of the new financial year in April. Prior to 2016, the budget was presented by the Finance Minister in the Parliament on the last working day of February. The Budget Division of the Department of Economic Affairs, within the Ministry of Finance, is the primary body responsible for preparing the budget.^[1]

The Union Budget is presented through the Finance Bill, and the Appropriation Bill must be passed by the Lok Sabha before it can take effect on April 1, the beginning of India's financial year.

Ever since television became ubiquitous, the Union Budget has been broadcast live from Sansad Bhawan on DD National, DD News, and Sansad TV and many times on the All India radio. The presentation typically runs uninterrupted from 11 AM to 1 PM, followed by a panel discussion that assesses the changes, benefits, and shortcomings of the budget. Additional budget documents and materials are available on the official budget website and the Union Budget mobile app.

The Rail Budget—which was presented separately since 1924—was merged with the Union Budget in 2016.^[2]

Since 1947, there have been a total of 73 annual budgets, 14 interim budgets, and four special or mini-budgets.^[3][4]

Traditions

Time of budget announcement

Yashwant Sinha, the Finance Minister of India in the NDA government led by Prime Minister Atal Bihari Vajpayee, changed the longstanding tradition by announcing the 1999 Union Budget at 11 AM. The budget was previously presented at 5 PM, a colonial practice designed to align with British morning time.^[5] This new timing became the standard from 2001 onwards.

Date of budget announcement

In 2017, breaking from the tradition of presenting the Union Budget on the last working day of February, Arun Jaitley, the then Finance Minister in the NDA government led by Prime Minister Narendra Modi, announced that the budget would now be presented on February 1.^[6]

Halwa ceremony

The printing of the budget documents commence approximately a week before their presentation in the Parliament, marked by a traditional Halwa ceremony. During this event, a large quantity of halwa (a sweet delicacy) is prepared and served to the officers and support staff involved in the process. As part of the ceremony, these individuals are isolated and remain in the North Block until the Budget is presented. The Finance Minister serves the halwa, in keeping with the Indian custom of sharing something sweet before embarking on an important task.^[7]

Lock-In Period

The "lock-in" is a period during which the secrecy of the Budget is maintained to ensure its contents are not divulged or leaked before the actual presentation. It begins with the Halwa ceremony and commemorates the commencement of a period of isolation for the finance ministry staff at the Budget Press, located at the ministry's headquarters in the North Block. These staff members are not allowed to leave the premises until the Finance Minister concludes their Budget speech on February 1.

In the past, the "lock-in" period, during which officials were not allowed to contact the outside world, was longer. However, since 2021, with the Budget being presented in a purely digital format, the lock-in period has become shorter.

The basement of North Block once housed a printing press that was used to print budget documents for 40 years, from 1980 to 2020. Since then, the budget has transitioned to a digital format, with only a minimal number of documents being printed, while the majority of distribution takes place through a mobile app or the official website.

The transition to a digital format also shortened the lock-in period, reducing it to just five days, compared to the previous duration of up to two weeks.

Briefcase

Until 2018, it was a tradition for the Minister of Finance to carry the budget in a leather briefcase. This practice was established by India’s first Finance Minister, R. K. Shanmukham Chetty.

Bahi-Khata

On 5 July 2019, Finance Minister Nirmala Sitharaman broke tradition by carrying the budget in a Bahi-Khata, a traditional Indian accounting ledger used to maintain financial records. On 1 February 2021, she presented the first paperless budget, using a digital tablet wrapped in a traditional bahi-khata style pouch.

FM called on President at the Rashtrapati Bhavan

As per established tradition, the Finance Minister meets the President at the Rashtrapati Bhavan to seek assent before heading to Parliament to present the Union Budget. The President offers the Finance Minister a customary serving of curd and sugar, a gesture believed to bring good luck.

Cabinet Meeting in Sansad Bhawan

A meeting of the Union Cabinet is held at 10 AM on February 1. After receiving the cabinet's approval, the Finance Minister presents the Union Budget in the Parliament of India.

Post Budget Press Meet

The Union Minister for Finance and Corporate Affairs, accompanied by the Ministers of State for Finance, the Finance Secretary, and other Secretaries of the Ministry of Finance, addresses a Post-Budget Press Conference. During this conference, they provide details on the announcements made in the Budget speech and respond to media queries.

Post Budget Meeting

The Finance Minister addresses the Reserve Bank of India's central board of directors, highlighting key points of the Union Budget, including the fiscal consolidation roadmap and the high capital expenditure plan. The minister also discusses the announcements made during the budget speech. It is customary for the Finance Minister to address the RBI board after the budget presentation.

Interim Budget

An interim budget is not the same as a "Vote on Account". While a "Vote on Account" addresses only the expenditure side of the government's budget, an interim budget provides a complete set of accounts, including both expenditure and receipts. An interim budget presents a full financial statement, similar to a complete budget. Although the law does not prevent the Union government from introducing tax changes, successive governments typically avoid making significant changes to income tax laws during an interim budget, especially in an election year.^[8]

Difference between Interim Budget and Union Budget

An interim budget differs from a Union budget in that it serves as a temporary financial plan for the government when elections are approaching. This budget seeks parliamentary approval to cover the government's expenses for the remaining months of its term. Unlike the Union budget, which outlines the entire year, an interim budget focuses on the transition period until the new government assumes office. While estimates are provided for the full year, the incoming government has the flexibility to modify them when preparing the new budget. The interim budget also has the authority to make changes to the tax regime, but historically, significant tax adjustments or new schemes are avoided due to the limited time in office. Essentially, it mirrors the first part of a Union budget, detailing the previous year's income and expenses, with only essential expenses documented until the elections. Additionally, regulations from the Election Commission of India prevent any substantial policy changes that could potentially influence voters during this critical period.^[9]

History Of Budget

Pre-liberalization

The first Union Budget of independent India was presented by R. K. Shanmukham Chetty on 26 November 1947. Total revenues amounted to ₹171.15 crore, while the fiscal deficit was ₹24.59 crore. The total expenditure was estimated at ₹197.29 crore, with Defence expenditure constituting ₹92.74 crore.

The Union Budgets for the fiscal years 1959–61 to 1963–64, including the interim budget for 1962–63, were presented by Morarji Desai. On 29 February 1964 and 1968, he became the only Finance Minister to present the Union Budget on his birthday.^[10] Desai presented a total of five annual budgets and an interim budget during his first term, and three final budgets and one interim budget during his second term, when he served as both the Finance Minister and the Deputy Prime Minister of India. After Desai's resignation, Indira Gandhi, the then Prime Minister, took over the Ministry of Finance, becoming the first woman to hold the post of Finance Minister in India.

Hirubhai M. Patel presented the shortest budget speech for the interim budget of 1977, which was merely 800 words long.^[11] Pranab Mukherjee—the first Rajya Sabha member to hold the Finance portfolio—presented the annual budgets for the financial years 1982–83, 1983–84, and 1984–85. Rajiv Gandhi presented the Union Budget for 1987–89 after V. P. Singh resigned from his government, becoming the third Prime Minister to present a budget, following in the footsteps of his mother and grandfather. N. D. Tiwari presented the budget for 1988–89, followed by S. B. Chavan for 1989–90 and Madhu Dandawate for 1990–91. Dr. Manmohan Singh became the Finance Minister and presented the interim budget for 1991–92, as elections were forced due to political developments. Following early elections in May 1991, in which the Indian National Congress returned to power, Dr. Manmohan Singh, as the Finance Minister, presented the budget for 1991–92.

Post-liberalization

Manmohan Singh, under Prime Minister P. V. Narasimha Rao, opened the Indian economy in his annual budgets from 1992 to 1993,^[12] encouraging foreign investments and reducing the peak import duty from over 300% to 50%. After the 1996 elections, a non-Congress ministry assumed office, and the financial budget for 1996–97 was presented by P. Chidambaram, who was then part of the Tamil Maanila Congress. Following a constitutional crisis when the I. K. Gujral Ministry was on its way out, a special session of Parliament was convened solely to pass Chidambaram's 1997–98 budget, which was passed without debate. After the general elections in March 1998, which led to the Bharatiya Janata Party forming the Central Government, Yashwant Sinha, the then Finance Minister, presented both the interim and final budgets for 1998–99. Following the general elections in 1999, Sinha again became the Finance Minister and presented four annual budgets from 1999–2000 to 2002–2003. Due to the elections in May 2004, an interim budget was presented by Jaswant Singh.

The Union Budget of India for 2012–2013 was presented by Pranab Mukherjee on 16 March 2012, marking the seventh budget of his career. These budgetary proposals were applicable for the financial year from 1 April 2012 to 31 March 2013. The Union Budget for 2013–2014 was presented by P. Chidambaram on 28 February 2013. The Interim Union Budget for 2014–2015 was presented on 17 February 2014.^[13] The Union Budget of India for the years spanning from 2014 to 2019 was presented by Arun Jaitley.^[14][15] The Interim Union Budget for 2019–2020 was presented by Piyush Goyal,^[16] and Nirmala Sitharaman has been presenting the Union Budget since 2020.^[17][18]

Finance ministers who have presented the budget

Timeline

Morarji Desai holds the record for presenting the most Union Budgets, with 10 budgets, followed by P. Chidambaram and Nirmala Sitharaman, both of whom presented 9. In 2026, Sitharaman equalled Chidambaram's record. As Finance Ministers, Pranab Mukherjee presented 8 budgets, C. D. Deshmukh presented 7 budgets, while Manmohan Singh and T. T. Krishnamachari each presented 6 budgets.^[3]

Notes:
¹During Deshmukh's tenure, the Budget papers were prepared in Hindi as well for the first time.^[19]
2Morarji Desai presented eight annual and two interim budgets.^[19]

List of Union Budgets

Union Budget History

The following table shows the Total Receipts, Fiscal Deficits, Total Defense Spending and Major Subsidies as listed in past Union Budgets, as per the "At a Glance" subsection of each budget.^[4] The following figures are not adjusted for inflation.

See also

• Military budget of India
• Railway budget of India
• Indian Economy

References

^[24]

1. ^ "How does government prepare its Union Budget every year". The Times of India. 31 January 2022. Retrieved 2 February 2022.
2. ^ Chakraborty, Abhishek (21 September 2016). "Railway Budget, Presented For 92 Years, Merged With Union Budget". NDTV. Retrieved 6 March 2021.
3. ^ Padmanabhan, Arvind (12 February 2014). "Chidambaram is second only to Morarji Desai in presenting Budget". Business Today. Retrieved 29 September 2017.
4. ^ "Previous Union Budgets". Government of India. 10 June 2024. Retrieved 11 June 2024.
5. ^ "Budget with a difference". 17 March 2001. Retrieved 8 March 2009.
6. ^ "Union Budget 2017 on 1 Feb: End of a colonial hangover for speedy implementation of schemes". Firstpost.com. Firstpost. 16 November 2016.
7. ^ "Printing Of Union Budget Document Begins With 'Halwa' Ceremony". NDTV. Press Trust of India. 19 February 2016. Retrieved 19 February 2016.
8. ^ "2019 Union Budget of India". money.bhaskar.com. Archived 25 March 2019 at the Wayback Machine. Retrieved 28 January 2019.
9. ^ "Unveiling the Interim Budget 2024 Blueprint". 2024-01-29. Archived from the original on 30 January 2024. Retrieved 2024-01-31.
10. ^ "The Central Budgets in retrospect". pib.nic.in. Retrieved 6 March 2021.
11. ^ "Budget 2020: Who gave the longest Budget speech?". Deccan Herald. 25 January 2020. Retrieved 21 January 2021.
12. ^ "Meet Manmohan Singh, the economist". 20 May 2004. Retrieved 22 February 2008.
13. ^ "Salient Features of Interim Union Budget of India for 2014-15". IANS. news.biharprabha.com. Retrieved 17 February 2014.
14. ^ "Union Budget 2018 Highlights: Key takeaways from Arun Jaitley's fifth Budget". Moneycontrol. Retrieved 1 February 2018.
15. ^ "Expectation from union budget 2014-15". Patrika Group. 10 July 2014. Retrieved 10 July 2014.
16. ^ "Budget 2019: Full text of Piyush Goyal's budget speech". Mint. 1 February 2019. Retrieved 1 February 2019.
17. ^ "india budget". Government of India. Retrieved 2 February 2021.
18. ^ "Key Highlights of Union Budget 2019-20". Press Information Bureau, Government of India. 5 July 2019. Retrieved 27 August 2019.
19. ^ "Finance Ministers of India: Budget through the years: The men who made India". The Economic Times. 29 June 2019. Retrieved 3 February 2021.
20. ^ "Receipt Budget, 2022-2023". Archived 2023-02-09 at the Wayback Machine.
21. ^ "Receipt Budget, 2023-2024". Archived 2024-11-18 at the Wayback Machine.
22. ^ "Receipts". www.indiabudget.gov.in
23. ^ Briefing, India (2024-07-23). "India's Union Budget 2024-25: Key Announcements". India Briefing News. Retrieved 2024-07-23.
24. ^ Business Standard Budget 2024-25 "Stay Updated with Latest Budget News"

Explanatory notes

1. ^ Total Receipts includes tax revenue, non-tax revenue and capital receipts.
2. ^ Fiscal deficit is defined as revenue receipts plus total non-debt receipts minus total expenditure, and is reflective of the total borrowing requirement of Government.
3. ^ Total Defense Spending is a sum of both Revenue and Capital Expenditure on Defense Services (in budgets prior to 2015).
4. ^ Major Subsidies includes Fertiliser, Food and Petroleum, as per budgets from 2016 onwards.

External links

• Indian Budget by Ministry of Finance
• Economic Survey and Union Budget Archived 15 January 2018 at the Wayback Machine
  • List of Budget Speeches (since 1947) Archived 24 December 2016 at the Wayback Machine