Union Budget 2024: Understanding the Budget Plan and Its Formulation

NSE

With high hopes from both industries and taxpayers, Union Finance Minister Nirmala Sitharaman is expected to present the Union Budget 2024-25 in the latter half of July. This will be the complete Budget for the fiscal year 2024-25. Earlier this year, on February 1, the Finance Minister had presented an Interim Budget due to the 2024 Lok Sabha elections. This upcoming Budget is particularly important for Prime Minister Narendra Modi’s NDA government, which recently won its third consecutive term in the 2024 elections.

Before the first Budget of NDA 3.0 is presented, let’s understand the significance of a ‘Budget plan’ in its creation. Simply put, a Budget plan is a document that outlines the expected costs and revenues for a specific period. The Budget includes estimates of the central government’s spending and income for a fiscal year, which runs from April 1 to March 31 of the following year.

The Finance Ministry starts preparing the Budget about six months before it is presented in Parliament. This preparation involves a detailed analysis of past financial data and projections of the public’s needs. A well-crafted Budget plan is essential to meet all the required goals effectively.

Since the Union Budget affects the lives of billions of people in India, it is crucial for the government to develop an effective Budget plan that can handle financial losses and achieve financial gains. During the planning process, the government collects financial data from various administrative bodies and analyzes it to determine financial needs. After reviewing all public welfare schemes, appropriate resources are allocated to different ministries.

The Budget-making process involves government officials from various departments and ministries, as well as public individuals and stakeholders.