Government Budgeting in India – The Process and Constitutional Requirements
A budget is a comprehensive report presented by the government, consolidating revenues and outlays. It serves as the annual financial statement of a government, detailing its revenue and expenditure.
The term ‘Budget’ is not explicitly mentioned in the Indian Constitution; instead, the corresponding term used is ‘Annual Financial Statement’ (Article 112).
Article 265: No tax shall be levied or collected except by the authority of law, requiring parliamentary approval for taxation.
Article 112: The President shall, in respect of every financial year, cause to be laid before Parliament the Annual Financial Statement.
The Fiscal Responsibility and Budget Management (FRBM) Act, enacted in 2003, aims at better budget management. It mandates certain documents to be presented in Parliament annually, alongside the Budget, regarding the country’s fiscal policy.
The Budget documents include:
Documents at Serial 1-4 are mandated by the Constitution, and those at Serial 6-9 are as per the provisions of the FRBM Act. Other documents support the mandated ones with explanatory content.
Until 2016, the Indian Railways budget was presented separately but merged with the Union Budget since 2017. Figures related to Railways are included in the Annual Financial Statement.
The Budget is presented to Parliament on a date fixed by the President. Since 2017, it is presented on February 1, preceded by the Economic Survey on January 31. In an election year, the Budget may be presented twice — first for a Vote on Account and later in full.
If the Parliament cannot vote on the entire budget before the new financial year, a Vote on Account is used, providing funds for government operations for a part of the year, usually two months.
The Finance Minister’s Budget Speech is in two parts: Part A deals with the general economic survey, while Part B relates to taxation proposals. The Annual Financial Statement is presented at the conclusion of the speech in the Lok Sabha.
What is the constitutional basis for the Indian budget process?
a. Article 110
b. Article 112
c. Article 266
d. Article 120
Which Act was enacted in 2003 to enhance budget management in India?
a. Goods and Services Tax (GST) Act
b. Income Tax Act
c. Fiscal Responsibility and Budget Management (FRBM) Act
d. Banking Regulation Act
Which document is presented alongside the Annual Financial Statement as per the FRBM Act?
a. Demands for Grants
b. Expenditure Budget Volume-1
c. Finance Bill
d. Economic Survey
When was the last separate Railway Budget presented before its integration with the Union Budget?
a. 2016
b. 2017
c. 2018
d. 2015
In an election year, how many times may the budget be presented?
a. Once
b. Twice
c. Thrice
d. No limit
Which article of the Indian Constitution ensures parliamentary approval for taxation?
a. Article 110
b. Article 112
c. Article 265
d. Article 114
What is the primary focus of Part B in the Finance Minister’s Budget Speech?
a. Economic Survey
b. Taxation Proposals
c. Fiscal Policy Strategy
d. Expenditure Budget
Which year marked the integration of the Railway Budget with the Union Budget?
a. 2015
b. 2016
c. 2017
d. 2018
What does a Vote on Account primarily deal with in the budget process?
a. Taxation
b. Expenditure
c. Fiscal Policy
d. Economic Survey
What is the key purpose of the Economic Survey presented before the budget?
a. Historical Financial Data
b. Overview of Economic Status
c. Taxation Proposals
d. Fiscal Responsibility Assessment
Kindly share your responses in the comment section!!
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