The first budget in independent India was presented on November 26, 1947 by R.K. Shanmugham Chetty. The annual budget is a statement of the government's estimated receipts and expenditures for the coming fiscal year. It includes revenues, expenses, and allocation of resources according to socio-political priorities. The Union Budget is presented annually on the last working day of February by the Finance Minister. It outlines taxation, expenditure, and the government's policies and programs for the forthcoming year.

2. Budget in History
 ‘Budget System’ was introduced in India on 7th April,
1860. James Wilson the first Indian Finance Member
delivered the budget speech expounding the Indian
financial policy as an integral whole for the first time
 Post independence, the first budget was presented on
November 26, 1947 by India's first Finance Minister Sri
R.K. Shanmugham Chetty.

3. What is budgeting
 The annual exercise of budgeting is a means for detailing the
efficient use of public resources.
 A statement of the estimated receipts and expenditure of the
Government for that year. This statement known as the Although
the Indian ‘Annual Financial Statement’ Constitution does not
mention is the main fiscal or the term ‘Budget’, it provides
budgetary document of the that the President shall in
Government. respect of every financial year cause to be laid
before both the Houses of Parliament.
 A government budget is defined as a legal document that is
passed by the legislature, and approved by the chief executive-or
President.

4. The two basic elements of any budget are the Revenues and expenses Government Budget is designed for optimal
allocation of resources taking into account larger socio-political considerations.
The Union Budget of India, also referred as the General Budget, is presented each year on the last working
day of February by the Finance Minister of India to the Parliament
Article 112 of the Constitution of India stipulates that Government should lay before the Parliament an
Annual Financial Statement popularly referred to as ‘BUDGET’.
Budget is prepared On Cash BasisWhatever is expected to be actually received or paid under proper sanction
during a financial year (including arrears of the past years) should be budgeted in that year.

5. BUDGET DOCUMENTS
(a) Annual Financial Statement
(b) Demands for Grants
(c) Receipts Budget
(d) Expenditure Budget Volume -1
(e) Expenditure Budget Volume- 2
(f) Finance Bill
(g) Memorandum Explaining the Provisions in the Finance Bill
(h) Budget at a Glance
(i) Highlights of Budget
(j) Status of Implementation of Announcements made in Finance
Budget Speech
(k) Fiscal Responsibility and Budget Management Act related

6. Parliamentary procedures
PRESIDENT’S APPROVAL:
According to Article 204(1) of Rules of Procedure and Conduct of Business in Lok Sabha, the
the Parliament on such date as is fixed by the President.
According to parliamentary custom, the Budget is presented at 11.00 am (Earlier it was 5.00 pm.)
day of February i.e. about a month before the commencement of the financial year except in the
Elections to Lok Sabha are held.
In an election year, the Budget may be presented twice, first to secure a Vote on Account for a few
in full.

7. BUDGET PRESENTATION
While presenting the Budget on the scheduled day in the Lok Sabha (at 11.00 hours), the Finance
speech giving inter alia details of the proposals for the new financial year regarding taxation,
expenditure plans of the Government.
The Budget Speech is largely a policy document whereby the Finance Minister states the salient
financial administration of the year ending and the year commencing.
The main purpose however is to focus attention on the policies and programmes of the
they had been already implemented and are proposed to be implemented during the forthcoming
The Budget is laid on the Table of the Rajya Sabha soon after the Finance Minister has
completed his budget speech in the Lok sabha.
No discussion takes place on the day the Budget is presented.
Sets of Budget papers are supplied to Members after the budget has been presented.

8. ROLE OF THE EXECUTIVE IN THE BUDGET PROCESS
Budget Division in the Ministry of Finance prepare the budget for the financial year, its own
those of other Departments/ Ministries are required to prepare their detailed estimates.
The estimates are prepared separately for Plan and Non plan expenditure. The detailed estimates of
prepared by the estimating authorities according to their assessment of requirements for the
view the actuals of the past years, trends of expenditure in the current year, arrears of previous
already taken by the Government.

9. ROLE OF BUDGET DIVISION IN THE DEPARTMENT OF ECONOMIC AFFAIRS
The Budget Division in the DEA has the prime responsibility for the preparation and submission of
the Parliament (other than Railways), as well as the Supplementary Demands for Grants and the
Grants.
The Budget, Supplementary and Excess Demands of States and Union Territories under the
entrusted upon the Budget Division.

10. BUDGET ANALYSIS
Key issues:
• Sector wise allocations
• Priority sector allocations
• Allocations for Defence, Science, Space
• New schemes – Popular
• DirectTax implications – personal, corporate
• IndirectTax Implication – excise, customs, import & export.
• Expenditure trends
• Non plan expenditure – broad categories
• Non plan expenditure – subsidies, interest subsidies Plan expenditure Central plan outlay.
• Revenue trends
• Deficits
•Tax and nonTax revenue
• Capital receipts trends
• Fiscal prudence measures
• Govt. debt
• Govt. borrowings
• Monetary policy issues

11. SECTORAL OVERVIEW