North Block, which houses the finance ministry, wears the look of a fortress these days. The finance minister’s pre-Budget consultations with various groups are over and outsiders, including journalists, are not allowed inside the building now. Preparations for Budget 2011-12 are in full swing. Intelligence Bureau sleuths in plain clothes are watching each and every movement of the team which prepares the Budget documents.
The Budget cycle normally starts towards the end of September and lasts till May in the next financial year. On the presumption that the Budget shall be presented at 11 am on the last working day of February, the Budget Division in the finance ministry prepares a comprehensive schedule for carrying out Budget preparation activities. The Budget is prepared by the Budget Division on the basis of detailed estimates of expenditure and receipts received from various departments and ministries.
The Budget process begins with the issue of the Budget Circular, normally in the month of September. The circular is issued with the purpose of providing guidance to ministries in framing their revised estimates for the current year and Budget Estimates for the ensuing financial year, for further rendition to the Budget Division.
The following two months — October and November — are devoted to follow-up action on the Budget circular that includes coordinating with various ministries and departments, procuring data for the receipts Budget and scrutiny of estimates by ministries for pre-Budget meetings.
In mid-December, ceilings of expenditure are finalised and communicated to various ministries by the first week of January. Within one week of the communication of ceilings, the ministries render statement of Budget estimates to the Budget division. Estimates of borrowings and revenue are also made in December, while those for major subsidies and defence expenditure are made by the last week of January.
In the first week of January, the finance minister starts consultations with sectoral representatives, such as economists, industrialists, trade unions, regulators, to get their suggestions on Budget.
During this period, ministries also send their Plan estimates. All expenditure estimates are also made by the first week of February and printing of Budget documents begins. The printing gets over by February 25, with the finance minister’s speech, which is protected because of the high level of secrecy surrounding the Budget. Even the finance minister cannot take the speech home or lock it up in his own drawer. After going through the speech, he has to return it to the additional secretary for safekeeping.
After the presentation of the Budget, it is debated in Parliament, but not on the same day.
After the general discussion on the Budget is over, Parliament is adjourned for a fixed period, when the demands for grants of the ministries and departments are considered by parliamentary committees. These committees have to submit their report to the Lok Sabha within a specified period.
The whole process of voting the Budget involves voting for demands for grants, passage of Appropriation and Finance Bills. Once these are done, these Bills get the President’s nod.
| BUDGET TIMELINE |
| * February 22: Finalisation and printing of Budget at a Glance |
| * February 25: Finance minister’s Budget speech and key features of Budget |
| * February 26: Summary for the Cabinet |
| * February 27/28: Obtaining approval of the PM to the ‘Summary for the President’ |
| * February 27/28: President’s recommendations |
| * February 28: Obtaining approval of the Cabinet to the Budget proposals |
| * February 28: Presentation of the Budget in the Lok Sabha |
| * Second week of March: Passing of vote on account by the Lok Sabha |
| * Second/third week of March: Passing of vote on account by the Rajya Sabha |
| * As per business: General discussion, FM’s reply and laying of reports by standing committees; Voting for demands for grants |
| * April: Passing of appropriation Bill, finance Bill in the Lok Sabha and Rajya Sabha |
| * First week of May: President’s Assent to the appropriation Bill and finance Bill |
As the whole process of voting the Budget goes beyond a current financial year, there is a provision for the government to carry on by passing a vote on account.
There is a need for maintaining secrecy, accuracy and timeliness in the work related to the preparation of Budget. All the statements, information and inputs require intensive checking with special attention given to the manually generated statements, for which an additional level of check is to be ensured. The list of such statements allocated amongst the staff and officers is circulated internally every year in the Budget Division.
The Budget is kept a top secret mainly due to indirect tax proposals, which, if leaked early, can result in hoarding. At least a month before the presentation of the Budget, entry to North Block is restricted and all communications of the officials working on the Budget are monitored. Introduction of the Direct Taxes Code and Goods & Services Tax is likely to make the annual Finance Bill less relevant. This would lift the veil of secrecy that currently surrounds around tax-related proposals in the Budget.
