Representative image showing Union Budget.
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The Interim Union Budget is set to be presented by Finance Minister Nirmala Sitharaman on February 1.
Union Budget, presented before the Parliament for every forthcoming financial year, is an annual financial statement with estimated receipts and expenditure of the Indian Government.
Union Budget holds a pivotal place in the funding of a government and shaping its economy, outlining the policy structure of the country.
Aiming for a balanced economic growth, a budget requires months of planning to formulate it demanding several departments of the government to work together.
Though Union Budget (speech) is presented by the Finance Minister but a whole lot of people are involved backstage in the preparation of it.
The Union Budget is prepared by the Budget Division under the Department of Economic Affairs, which operates under the Union Ministry of Finance.
The process begins about six months prior to the presentation of the budget, around August-September of the previous year.
the union Finance Ministry issues circulars to all ministries, states and union territories for them to prepare estimates for the upcoming financial year.
All the ministries, states and UTs put forward their revenues and expenses from the previous year, adding to the estimates.
The proposed estimates by all the ministries, states and UTs are received, reviewed by the Revenue Department and other top officials and then sent to the Finance Ministry.
A comparison of the estimated revenues and expenditure is done by the Finance Ministry to find and calculate the overall budget deficit.
The Chief Economic Advisor is consulted to have an overview of the budget deficit, followed by the Finance Ministry allocating revenue (budget) to different ministries and departments.
The Finance Ministry holds pre-budget consultations about the budget allocations with stakeholders, trade unions, economists, bankers and other state representatives.
After getting an approval following consultations, the Finance Minister goes in for a discussion with the Prime Minister about the tentative budget.
The Union Budget is finally presented by the Finance Minister in the Lok Sabha after an approval by the President.