All You Need To Know About Parliamentary Budgeting

The executive and legislative branches work together during the budgetary process in parliament to create a comprehensive package of tax and spending policies. The Government of India's annual financial statement, budget, or statement of the estimated receipts and expenses for each fiscal year are presented by Finance Minister. The constitution's Article 112 provides information on the annual financial statement. 

 

•    In the Constitution, the budget is referred to as the "annual financial statement." In other words, the word "budget" does not occur anywhere in the Constitution. The term "annual financial statement," which is covered by Article 112 of the Constitution, is known by this name.

 

•    Article 112 of the Indian Constitution mandates that the President present the budget to the Lok Sabha. A year's worth of transactions are covered by the annual financial statement.

 

•    The President has given the Union Finance Minister authority under Article 77(3) to create the budget, often known as the yearly financial statement, and guide it through parliament.

 

•    The budget displays the anticipated income and expenses for a specific fiscal year for the Indian government. The start of the fiscal year is April 1st each year. 

 

Each year at the budget session in February, the Finance Minister presents the budget to Parliament. During an election year, the timing could change.

 

The following are some significant documents that are laid on the table when the Union Budget is presented:

 

•    The annual financial statement summarizes the government's outlays and receipts.

 

•    Expenditure Budget: Provides information on the costs incurred by several ministries and departments, including each ministry's requests for grants.

 

•    Receipts Budget: Describes the government's tax and non-tax funding strategy.

 

•    Finance Bill: Provides information on any modifications to the nation's current tax legislation.

 

•    Long-Term Financial Plan Document: establishes rolling three-year targets in accordance with the Fiscal Responsibility and Budget Management Act for a number of financial metrics.

In India, there are four different operations that make up the budgetary process.

 

•    Preparation of the budget

•    Enactment of the budget

•    Execution of the budget

•    Parliament control over finance

 

•    The process of creating the budget is started by the ministry of finance every year, typically in September. The Department of Economic Affairs of the Ministry of Finance has a budget Division with this objective in mind.

 

•    To create an estimate or plan outlay, the ministry of finance gathers and coordinates the estimates of the costs of the many ministers and departments.

 

•    The finance ministry reviews the budget plans from the finance ministries and has the authority to modify them with the prime minister's approval.

 

•    The budget is then presented to the parliament for adoption and law after it has been drafted. The following steps must be completed for the budget:

 

•    The finance minister delivers the budget to the Lok Sabha. He makes his budget presentation in the Lok Sabha. A copy of the budget is also set down on the Rajya Sabha's table at this time. Printed copies of the budget are sent to members of parliament so they can review the specifics of the spending plans.

 

•    The finance bill is presented to parliament once the budget is presented. The Finance Bill covers ideas for brand-new taxes, adjustments to existing taxes, or the repeal of existing taxes.

•    The suggestions for revenues and expenses are discussed in Parliament. Parliamentarians actively engage in the discussion.

 

•    The budget and grant requests are both presented to Parliament at the same time. These grant proposals serve as evidence that Parliament must approve the budgetary estimates for a number of ministries.

 

•    Three different cut motions are presented by the members who want to reduce the grant, but they are either withdrawn or abandoned because their passage would equate to a vote of no confidence in the administration. However, cut motions are introduced to put moral pressure on the executive in an effort to catch the government's attention.

 

•    Token Cut Motion: It expresses a particular complaint that is under the purview of the government. The amount of the demand would be lowered by Rs 100, according to the statement. On the 26th day, the Speaker takes all outstanding demands to a vote and decides whether or not the members have discussed them. 'Guillotine closer' is the term used to describe this.

 

•    Policy Cut Motion: expresses disagreement with the demand's underlying policy. According to the statement, demand will be lowered to Re 1.

 

•    Economy Cut Motion: requests cost-effectiveness in the budgeted spending. It demands that the amount of the demand be decreased by a specific amount, which may be accomplished through a lump-sum reduction, the deletion of a demand item, or both.

 

The presentation of various requests for funding by the Parliament is allowed under Articles 113 and 114. Among them are:

 

•    It is offered when an unanticipated demand on Indian resources cannot be met with the information typically provided in a budget because of the size or the ambiguous nature of the service.

 

•    As a result, it is similar to the Lok Sabha giving the Executive a blank cheque.

 

•    A grant made in advance known as a "vote on account" enables the government to function up until the approval of the finance and appropriations bills as well as the voting on grant requests.

 

•    It is given for a specific reason and does not count towards any financial year's current service.

 

•    When the money authorized by the Parliament under the appropriation act for a certain service for the current fiscal year is proven to be insufficient for that year, a supplementary grant is given.

 

•    When a financial year's spending on any service exceeds the amount allocated for that service in the budget for that year, an excess grant is given.

 

•    After the fiscal year, the Lok Sabha votes on it.

 

•    When money can be reappropriated to pay for the anticipated spending on a new service, it is awarded. The Lok Sabha votes on a request for the grant of a nominal sum (of Rs. 1), and if approved, money are made available.

 

•    The Appropriation Bill is presented, discussed, and approved by the Parliament's Appropriations Committee after the legislature votes on grant requests. It lays out the legal justification for taking money out of the Consolidated Fund of India.

 

•    The finance bill is discussed and passed following the appropriations bill. At this time, the finance minister can accept or reject any changes that members of parliament suggest.

 

•    The Finance Bill and the Appropriations Bill are sent to the Rajya Sabha. These bills must be returned to the Lok Sabha by the Rajya Sabha in fourteen days, with or without changes. However, the Lok Sabha may or may not approve the bill.

 

•    The Finance Bill needs to be signed by the President. The law is made into a statue after being signed by the presidents. The bill cannot be vetoed by the president.

 

•    When the finance and appropriations bill is approved, the budget's implementation can start. It is authorized for the executive department to start raising money and using it for approved projects.

 

•    The Revenue Department of the Ministry of Finance is responsible for this. The necessary finances can be raised and spent by a number of ministries.

 

•    The primary accounting authority in this regard is the Secretary of the Ministry.

 

•    According to the established protocols, the reports of the various ministries are assembled. These accounts are audited by India's Comptroller & Auditor General.

 

•    A set of guidelines governs how the Finance Bill and the Appropriations Bill are presented, discussed, and approved.

 

•    Grants are given to the executive, which makes requests, by the sovereign Parliament. Demands for grants, more awards, supplemental grants, and other types of grants are examples of this.

 

•    The Lok Sabha receives expenditure estimates in the form of grant demands, with the exception of those for the Consolidated Fund of India.

 

•    Any demand may be accepted, rejected, or accepted with a decrease in the amount asked by the Lok Sabha. The Lok Sabha gets petitions for grants from individual ministries once the general budget debate is finished.

 

•    All demands were formerly presented by the finance minister, but they are now properly presented by the ministers of the respective departments. Even while the Rajya Sabha also discusses the general budget, these demands are not brought up there.

 

•    According to the Constitution, when an unexpected demand on the nation's resources cannot be explained with the specifics typically supplied in the yearly financial statement because of the size or indefinite nature of the service, the Parliament may provide a grant to cover the cost.

 

•    A new Appropriation Act must be passed in order to pass such a grant. It is intended to fulfil a specific function, such as meeting demands during a time of war.

 

•    Budgeting differs from taxation, borrowing, and spending discretion by the government. Good budgeting is necessary to allocate scarce resources to various governmental functions since resources are limited.

 

•    Every expense must be carefully analyzed, and the total spending for a specific time period must be estimated.

 

•    A government's stability depends on prudent spending, and sensible spending requires excellent earnings.

 

•    As a result, carefully thought out spending plans and accurate revenue projections are necessary for sound governmental finances.

 

The budget should be commended for bringing about significant paradigm shifts. However, the effectiveness of the policy and its coordination will now be crucial to India's long-term survival. The yearly fiscal statement known as the government budget, which shows the revenue and outlays for a fiscal year, is typically suggested by the legislature, approved by the president or chief executive, and then delivered to the nation by the finance minister. The annual financial statement of the country is another name for the budget.