Search

Union Budget 2019: All you want to know about the Budget; Process of Budget approval

This year, the government will present the Interim Budget, also known as ‘Vote on Account’ as it is close to the end of its term. An interim budget is usually passed by the Lok Sabha without discussion.

Feb 1, 2019 12:51 IST
Union Budget 2019

Finance Minister Piyush Goyal will be presenting the Union Budget 2019-20 on February 1, 2019. It will be the last Budget of the Modi Government before the 2019 Lok Sabha elections.

Union Budget 2019-20 will be the Interim Budget

This year, the government will present the Interim Budget, also known as ‘Vote on Account’ as it is close to the end of its term. An interim budget is usually passed by the Lok Sabha without discussion.

As per the Interim Budget or Vote on Account, the government seeks the approval of Parliament to meet its expenditure for the first four months (January-April) of the fiscal year with no changes in the taxation structure, until a new government takes over and presents a full Budget of the year in July 2019.

What are the Income Tax reforms announced in Interim Budget 2019?

All about Budget: Common FAQs

What is a Budget?

Budget is an estimate of revenues and expenditure of the Government during a financial year (April-March).

The Constitution of India defines Union Budget under the article 112. It is also known as Annual Financial statement. Under Article 112, a Statement of estimated expenditure of the Union Government has to be laid before the Parliament in respect of every financial year running from 1st April to 31st March. 

When is the Budget presented?

The Budget is presented for the proceeding financial year on a day determined by the Parliament. Traditionally, it was presented on the last working day of February.

Who presents the Budget?

The Budget is presented by the Finance Minister of India. The Finance Minister delivers a speech while introducing the Budget.

The Budget division in the Finance Ministry has complete responsibility over it, though it requires final approval from the Prime Minister.

What are the parts of the Budget speech?

The Budget speech of the Finance Minister is divided into two parts. Part I deals with the general economic survey of the country and allocations for various sector; while, Part II deals with the Finance Bill, which contains taxation proposals such as income tax revisions.

What does the Budget consist of?

Every budget consists of actual figures for preceding year’s budget and budget estimates for the current year. For instance, Budget presented in February 2018 will have the actual figures of the preceding year 2017-18 and will have the estimates for 2018-19.

What the Receipts and Payments Statement consists of?

The Budget also includes the Statement of Receipts and Payments (estimated) which is presented in three parts:

Consolidated Fund:  Consolidated Fund consists of revenues received by the government and expenses made by it, excluding the exceptional items which are met from the Contingency Fund or the Public Account. No money can be withdrawn from this fund without the Parliament's approval.

Public Account: Public Account is meant for those transactions where the government is merely acting as a banker. This fund was established under Article 266 (2) of the Constitution.

Contingency Fund: Contingency Fund is used to meet some urgent or unforeseen expenditure of the government. This fund was established by the government under Article 267 of the Constitution of India. The Contingency fund is at the disposal of the President.

Process of Budget approval

Once the Budget is presented before the Lok Sabha by way of a speech, it is then presented in Rajya Sabha. Both Houses of the Parliament then allot time for a general discussion on the Budget.

Presentation of report by Standing Committees on Demands for Grants

After the General Discussion on the Budget, the House is adjourned for a certain period. During this period, the Demands for Grants of various Departments and Ministries are considered by concerned Standing Committees.

These Committees are responsible for making their reports to the House within a fixed period. The Standing Committee consists of 45 Members, 30 from Lok Sabha and 15 from Rajya Sabha.

Note: The Article 113 of the Indian Constitution mandates that estimates of expenditure from the Consolidated Fund of India are included in the Annual Financial Statement (Budget), which requires voting by the Lok Sabha.

Once these estimates are voted, they are submitted in the form of Demand for Grants. Generally, one Demand for Grant is presented in respect of each Ministry or Department.

What happens after presentation of report by Standing Committees?

After the presentation of the reports to the House, the House moves ahead to the discussion and voting on Demands for Grants. The time for voting is allocated by the Speaker in consultation with the Leader of the House.

On the last day, the Speaker puts all the outstanding Demands to the Vote of the House. This process is commonly known as ‘guillotine’. The Lok Sabha holds the right to vote on the outstanding Demands.

Lok Sabha has the power to assent or refuse any Demand or even reduce the amount of Grant.  However, Rajya Sabha can only hold general discussions on the Budget; it does not have the power to vote on the Demands for Grants.

Presentation of Bills after the Budget

Appropriation Bill

The Appropriation Bill is introduced by the government after the completion of the General Discussion on the Budget proposals and Voting on Demands for Grants. The Appropriation Bill is aimed to give authority to Government to incur expenditure from and out of the Consolidated Fund.

Finance Bill

Once the Appropriation Bill becomes an Act, the Finance Bill is passed. The Finance Bill seeks to give effect to the Government’s taxation proposals. The Finance Bill must be passed within 75 days of its introduction by the Parliament.

Once the Finance Bill is passed, the final Budget gets approved.