Understanding the Government’s Annual Financial Statements
The Union Budget by Government presents a comprehensive picture of the financial condition of the Government of India including that of Indian Railways
Finance Minister Nirmala Sitharaman will present the Union budget for the financial year 2022-23 on February 1 at 11 a.m. The annual government financial statement presents an overall picture of the Indian government’s financial position, including that of the railways. It also affects the allocation of funds to defense.
Here is a brief overview of what the EU budget is and everything you need to know about it:
What is that?
According to Section 112(1) of the Constitution, the budget or annual financial statement contains the estimated revenue and expenditure of the Government of India for a fiscal year, which begins on 1st April and ends on 31st March.
The budget is prepared by the Ministry of Finance in consultation with other relevant ministries. Since 2017, the budget is presented on February 1 at 11 a.m. by the Minister of Finance in the Lok Sabha.
Previously, it was presented on the last day of February.
The presentation of the rail budget was a separate practice until 2017 when it was merged with the general budget. A Niti Aayog committee in its report suggested that it had been an annual ritual for over 90 years that should be abolished.
Therefore, the Union budget now presents a comprehensive picture of the Indian government’s financial situation, including that of the Indian Railways.
The Union budget gives the actual expenditure for the previous year, the revised forecast for the current year and the budget forecast for the following year.
Also read: Union budget 2022-23: from date to time, here’s everything you need to know
A few days before the presentation, a halwa ceremony is held to mark the printing of the budget documents.
According to tradition, the halwa is cooked in a large kadhai and served to all Ministry of Finance staff. After the ritual, all personnel directly associated with the budget process remain inside the ministry, cut off from their families, to maintain secrecy and any possible leaks until the budget is presented.
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Presentation of the budget
On the eve of Budget Day, the President addresses both Houses of Parliament. The speech also marks the start of the budget session of Parliament.
On Budget Day, the Minister of Finance meets the President at Rashtrapati Bhawan before heading to Parliament.
Before being presented to Parliament, the budget is formally approved by the Union Cabinet headed by the Prime Minister on the same day.
The Minister of Finance presents the Union budget which contains the Minister’s speech, the main features of the budget and the annual financial statements, which constitute the basic budget document. Simultaneously, a copy of the Budget is laid on the table of the Rajya Sabha.
How long is the budget speech?
The budget speech can last between 90 and 120 minutes. According to a report by Economic period, the 2020 budget speech was the longest in independent India’s history, lasting two hours and 40 minutes. Despite the length of the presentation, the Minister of Finance could not finish the last two pages and had to cut it short.
In 2019, Sitharaman delivered the budget speech for two hours and 17 minutes and broke Jaswant Singh’s previous speech record in 2003 by two minutes.
In 1977, the then finance minister, Hirubhai M Patel, gave the shortest budget speech of just 800 words.
No discussion of the budget takes place on the day of its presentation in the House. The presentation of the General Budget is followed by the introduction of the Finance Bill, and then the Lok Sabha adjourns for the day. There is no question time on the day of the presentation of the Union budget.
The entire process of discussing and voting on grant applications and the adoption of budget and appropriation laws must be completed by March 31.
Starting from the speech of the President on the eve of the budget day, its presentation in Lok Sabha and its discussion at a later date falls under the budget session of Parliament. It begins on January 31 and must be completed by March 31.
What is an interim budget and how is it different from the EU budget?
A draft budget is usually presented in an election year, when the government does not have time to present a full budget and needs the approval of Parliament to withdraw from the Consolidated Fund of India for its expenditure .
While the Union budget is for an entire financial year, a provisional budget is presented for a period before a new government takes over.
Just like the Union budget, the provisional budget also documents the details of the government’s expenditures and revenues during this period.
What is the vote on account, the request for subsidies, the finance bill and the finance bill?
Vote on the account:
Prior to 2017, the budget was presented on the last working day of February. Thus, Parliament was not able to vote the entire budget before the start of the new financial year.
To keep sufficient finances at the disposal of the government to run the country, it obtains a vote on account of Parliament. Normally, the interim vote is taken for two months for a sum equivalent to one-sixth of the estimated expenditure for the full year under the various Grant Applications.
However, with the advancement of the budget presentation date from 2017-18 to February 1, the need to obtain the vote on account is no longer necessary. Subsidy applications and the finance bill are adopted well before the end of the financial year.
Application for grants: The expenditure estimates, which are included in the annual financial statement, are presented in the form of a request for subsidies. Typically, a grant application is submitted on behalf of each ministry or department. For large ministries and departments, more than one application may be submitted.
appropriation bill: Once the request for grants has been voted on by the Lok Sabha, the approval of Parliament is sought through the Appropriation Bill to withdraw money from the Consolidated Fund of India.
Finance bill: During the presentation of the annual accounts to Parliament, a finance bill is also presented. It is normally introduced each year to give effect to the government’s financial proposals for the following financial year and includes a bill to give effect to additional financial proposals for any period. It details the imposition, abolition, remission, modification or regulation of the taxes proposed in the budget.
With contributions from agencies
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