- The full Union Budget for 2024-25 will be presented by Finance Minister Nirmala Sitharaman on February 1, marking the first full budget under the Modi 3.0 government.
- The Budget is planned months in advance, starting around August-September, with inputs from various stakeholders, including NITI Aayog, state representatives, economists, and trade unions.
- After presentation, the Budget must be debated and passed by both Houses of Parliament before implementation from April 1.
- The Union Budget sets the direction for India's economy, covering government revenues, expenditures, tax policies, and sectoral priorities, making it a crucial event for businesses and the public.
As India gets ready for the Union Budget 2024-25, which will be presented on February 1, it’s important to understand how this crucial financial document is prepared.
What is the Union Budget?
The Union Budget is the central government’s plan for income and spending for the upcoming financial year (April 1 to March 31). While the presentation itself is a big event, the work behind it takes several months of careful planning and discussion.
Role of the Finance Ministry
The Ministry of Finance is responsible for preparing the Budget. The key department handling this task is the Budget Division under the Department of Economic Affairs (DEA). This division works under senior officials and collaborates with different stakeholders to draft the Budget.
Switch to Effortless Payments!
How is the Budget Prepared?
The process starts around August or September, about six months before the Budget is presented. The Finance Ministry consults various groups, including:
- NITI Aayog (government policy think tank)
- State representatives
- Economists
- Trade unions
- Bankers
- Agricultural groups
The Finance Minister also holds pre-Budget meetings to understand different sectoral needs. After reviewing all the inputs, the Finance Minister finalizes the Budget proposals.
Budget Approval Process
After the Finance Minister presents the Budget, it must be passed by both Houses of Parliament—Lok Sabha and Rajya Sabha. The Budget is debated, reviewed, and approved before the new financial year starts on April 1.
Since 2024 was an election year, an Interim Budget (vote on account) was presented in February 2024, followed by a full Budget in July after the elections. This year, Finance Minister Nirmala Sitharaman will present the full Union Budget on February 1, which will be the first full Budget under the Modi 3.0 government.
Why is the Budget Important?
The Union Budget is a key document that outlines the government’s financial priorities, including tax policies and spending plans. Businesses, economists, and the general public closely follow it to understand the government’s focus areas. With 2025 being the first full Budget of the Modi government’s third term, expectations are high regarding economic growth, fiscal management, and social welfare programs.
As we move closer to February 1, the Union Budget remains a crucial tool for shaping India’s economy in the coming year.
