Stages in Enactment
The budget goes through the following six stages in the Parliament:
1. Presentation of budget.
2. General discussion.
3. Scrutiny by departmental committees.
4. Voting on demands for grants.
5. Passing of appropriation bill.
6. Passing of finance bill.
1. Presentation of Budget
- Date of Presentation: Traditionally, the budget was presented on the last working day of February. Since 2017, the date has been advanced to the 1st of February. This change allows for the budget to be passed and implemented earlier in the financial year, providing more time for ministries and departments to plan their expenditures.
- Finance Minister's Budget Speech: The finance minister delivers a budget speech in the Lok Sabha to present the budget to the House. The speech typically outlines the government's economic and financial policies, revenue and expenditure estimates, and major initiatives for the coming fiscal year.
- Budget Documents: Along with the budget speech, various documents are laid before the Lok Sabha. These include the Annual Financial Statement (or budget document), Demands for Grants, the Finance Bill, the Appropriation Bill, and other supporting documents.
- No Discussion on the Day of Presentation: There is no discussion on the budget on the day it is presented. Members of Parliament (MPs) get time to review the budget documents before a general discussion begins in the House.
- Budget Presentation to Rajya Sabha: After the budget is presented in the Lok Sabha, it is laid before the Rajya Sabha. While the Rajya Sabha can discuss the budget, it does not have the power to vote on the demands for grants, which is a prerogative of the Lok Sabha.
The budget documents presented to the Parliament comprise of the following :
(i) Budget Speech
(ii) Annual Financial Statement
(iii) Demands for Grants
(iv) Appropriation Bill
(v) Finance Bill
(vi) Statements mandated under the FRBM Act:
a) Macro-Economic Framework Statement,
b) Fiscal Policy Strategy Statement,
c) Medium Term Fiscal Policy Statement
(vii) Expenditure Budget
(viii) Receipts Budget
(ix) Expenditure Profile
(x) Memorandum Explaining the Provisions in the Finance Bill
(xi) Budget at a Glance
(xii) Outcome Budget
Earlier, the Economic Survey also used to be presented to the Parliament along with the budget. Now, it is presented one day or a few days before the presentation of the budget. This report is
prepared by the finance ministry and indicates the status of the national economy.
2. General Discussion
- Timing: The general discussion on the budget begins a few days after its presentation in the Lok Sabha and takes place in both the Lok Sabha and the Rajya Sabha.
- Duration: This discussion usually lasts for three to four days, during which MPs from both the Houses express their views on the budget.
- Scope: During the general discussion, the budget can be discussed as a whole or on any question of principle involved in it. This means MPs can speak on the general policies and strategies reflected in the budget, its overall impact on the economy, and the priorities set by the government.
- Restrictions: No cut motion can be moved during the general discussion, and the budget cannot be submitted to a vote during this stage. Cut motions are moved later in the budget process during the voting on demands for grants.
- Finance Minister's Role: At the end of the general discussion, the finance minister has a general right of reply. The minister responds to the points raised by MPs during the discussion and may clarify various aspects of the budget, including government policies and planned expenditures.
3. Scrutiny by Departmental Committees
After the general discussion on the budget concludes, the budget process enters the next phase of scrutiny by the 24 departmental standing committees of Parliament. These committees are responsible for examining and reviewing the budget in detail, specifically focusing on the demands for grants of the concerned ministries.
Here is how this phase works:
- Adjournment: Following the general discussion on the budget, both Houses of Parliament are typically adjourned for approximately three to four weeks. This adjournment allows the standing committees to work on reviewing the budget in detail.
- Departmental Standing Committees: There are 24 departmental standing committees in the Parliament, each responsible for a specific group of ministries or departments. These committees thoroughly examine the demands for grants presented in the budget for their respective ministries.
- Examination and Discussion: The standing committees scrutinize the budget allocations and expenditures for each ministry. They discuss the objectives, plans, and performance of the ministries and may seek clarifications or explanations from the respective ministry officials.
- Preparation of Reports: After completing their examination, the committees prepare reports detailing their findings, recommendations, and observations regarding the budget allocations and expenditure proposals of each ministry.
- Submission of Reports: The standing committees submit their reports to both Houses of Parliament for consideration. These reports provide valuable insights and feedback on the budget and may influence the decision-making process regarding the allocation of funds.
The establishment of the standing committee system in 1993 and its expansion in 2004 has significantly improved parliamentary financial control over government ministries. This system allows for more detailed, in-depth, and comprehensive oversight of the government's budget and its various expenditures. Through their reports, the committees play a crucial role in ensuring accountability and transparency in the use of public funds.