The Annual Budget is a big event in India because it decides how the government will spend and collect money for the year. An exciting moment in India's Budget history happened in 1991-92. Two Finance Ministers from different political parties took turns presenting the Budget.
Yashwant Sinha, from one party, presented the Interim Budget. Then, after the 1991 general elections, the Congress party took over, and Dr. Manmohan Singh, from Congress, presented the final Budget. This Budget was groundbreaking because it opened up India’s economy to the world by reducing import duties from over 300% to 50% and introducing a new service tax.
Now, let’s break down how the Budget is passed in the Indian Parliament, step by step:
Presentation of the Budget
The Budget presentation takes place at 11 AM, a change from the earlier 5 PM slot, a practice from British rule. The Finance Minister presents the budget in the Lok Sabha, the lower house of Parliament. This presentation is followed by a general discussion in both houses of Parliament: the Lok Sabha and the Rajya Sabha.
General Discussion
During the general discussion, members of Parliament (MPs) talk about the budget and the government's proposals. This stage is for broad examination, and MPs share their views and suggestions. The Finance Minister then responds to this discussion.
Detailed Review by Committees
After the general discussion, Parliament goes into recess. During this break, the budget is examined in detail by 24 Departmentally Related Standing Committees. These committees are made up of MPs from both houses.
Each committee looks at the budget allocations for specific ministries. They examine how much money is allocated to different programs and schemes, and how the money has been used in the past. Ministry officials appear before the committees to answer questions and provide more information.
The committees may also seek input from experts and the public. After these consultations, they submit their reports to Parliament.
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Discussion and Voting on Demands for Grants
Once Parliament resumes, the Lok Sabha discusses the Demands for Grants for various ministries. These demands are specific requests for funds needed by each ministry. The ministries change every year. After the discussion, the Lok Sabha votes on these demands.
If some demands are not discussed by the last day, they are 'guillotined.' This means they are voted on collectively without further discussion.
Appropriation Bill
After the demands for grants are voted on, they are consolidated into an Appropriation Bill. This bill authorizes the government to withdraw money from the Consolidated Fund of India to meet its expenses.
Finance Bill
Next, the Finance Bill is taken up for consideration and passing. This bill contains details of changes in tax rates and the imposition of new taxes. The Finance Bill must be passed for the budget to be fully implemented.
Role of Rajya Sabha
The Rajya Sabha, the upper house of Parliament, has a recommendatory role in passing the Finance and Appropriation Bills because they are money bills. The Rajya Sabha can suggest changes, but the final decision rests with the Lok Sabha.
Before the recess, the Rajya Sabha also holds a general discussion on the budget. Its members join Lok Sabha MPs in the Standing Committee deliberations during the recess. When the Lok Sabha discusses the Demands for Grants after the recess, the Rajya Sabha discusses the working of a few ministries.
After the Lok Sabha passes the Finance Bill, it is sent to the Rajya Sabha for recommendations. The Rajya Sabha must return the bill within 14 days, with or without recommendations. If it does not return the bill within 14 days, it is deemed to have been passed by Parliament.
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Extra Budget Requests
Sometimes, during the year, the government needs to spend more money than originally planned. In such cases, it introduces Supplementary Demands for Grants. These demands are usually not examined by the standing committees.
For example, in 2021, two supplementary budgets were passed. The first was during the Monsoon Session, allowing additional spending of ₹23,675 crore. The second was during the Winter Session, authorizing an extra ₹2.99 lakh crore.
Post-Budget Checks
Parliament's review of the government's finances continues even after the budget is passed. The Public Accounts Committee reviews reports from the Comptroller and Auditor General (CAG) of India to check if the government is spending money as approved by Parliament.
They submit their findings in a report. The Estimates Committee also monitors government spending and policies to ensure that the money approved by Parliament is used as intended.
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Conclusion
The process of passing the budget in India's Parliament is detailed and makes sure that all parts of government spending are carefully checked. It starts with the Finance Minister presenting the budget. Then, committees closely examine it, and finally, it gets approved. Each step involves careful thought and input from different people. This thorough process helps keep the government's financial planning and spending clear and responsible