Budget 2024-25

The Budget, or the Annual Financial Statement as it is also known, is an important tool for India’s economic and social governance. It sets out the government’s financial agenda for one year and affects every citizen and every section of the economy. Presentation and enactment of the budget are landmark events in Indian polity that show what the government values most.

History

The concept of a budget was introduced during Pre independence era i.e. during British rule, with the first budget presented on April 7, 1860, by James Wilson, a Scottish economist and politician under the British East India Company.

After independence R.K. Shanmukham Chetty presented Republic of India’s first budget on November 26, 1947. The passage of time has seen it evolve to embrace present day economic principles needed to cater for an expanding country

Background

The Union Budget is formulated by the Ministry of Finance in concurrence with diverse ministries and departments. It contains estimates of income and expenditure as well as indicates government’s fiscal policies. The Finance Minister then presents it to Parliament for assent before being implemented.

Constitutional Framework 

Indian Constitutional articles which provide framework to the Union Budget such as:

• Article 110: Defines a Money Bill, including provisions related to taxes, borrowing, and expenditure from the Consolidated Fund of India.
• Article 111: Requires the President’s assent for all Bills, including Money Bills, for them to become law.
• Article 112: Mandates the President to present the Annual Financial Statement to both Houses of Parliament.
• Article 113: Details procedure for presenting demands for grants in Parliament.
• Article 114: Specifies that funds can be drawn only from Consolidated Fund of India by appropriation made by law.
• Article 115: Covers supplementary, additional or excess grants
• Article 116: Deals with votes on account, votes of credit and exceptional grants

Article 110

Article 110 of the Indian Constitution is crucial as it defines what constitutes a Money Bill. Here are its clauses:

1. Clause 1: A Bill is deemed to be a Money Bill if it contains only provisions dealing with:
   • (a): The imposition, abolition, remission, alteration, or regulation of any tax.
   • (b): The regulation of borrowing of money or the giving of any guarantee by the Government of India, or the amendment of the law with respect to any financial obligations undertaken by the Government of India.
   • (c): The custody of the Consolidated Fund or the Contingency Fund of India, the payment of moneys into or the withdrawal of moneys from any such Fund.
   • (d): The appropriation of moneys out of the Consolidated Fund of India.
   • (e): The declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure.
   • (f): The receipt of money on account of the Consolidated Fund of India or the public account of India or the custody or issue of such money or the audit of the accounts of the Union or of a State.
   • (g): Any matter incidental to any of the matters specified in sub-clauses (a) to (f).
2. Clause 2: A Bill shall not be deemed to be a Money Bill by reason only that it provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licenses or fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alteration, or regulation of any tax by any local authority or body for local purposes.
3. Clause 3: If any question arises whether a Bill is a Money Bill or not, the decision of the Speaker of the House of the People (Lok Sabha) thereon shall be final.
4. Clause 4: There shall be endorsed on every Money Bill when it is transmitted to the Council of States (Rajya Sabha) under article 109, and when it is presented to the President for assent under article 111, the certificate of the Speaker of the House of the People signed by him that it is a Money Bill.

How the Budget Passes

1. Presentation: The Finance Minister lays the budget before the Lok Sabha, generally on the first February.
2. General Discussion: Ideas that MPs need to have are quite general and refer to the principles of the budget.
3. Departmental Review: The budget is taken to the Departmental Standing Committees to get scrutinized in detail.
4. Demand for Grants: There is a consideration of each ministry’s spending, and the requests for grants are made and voted for.
5. Appropriation Bill: This Bill provides the government with such powers as to withdraw money from the Consolidated Fund of India.
6. Finance Bill: It must provide for taxes and requisitions of money, as well as be passed to implement ever year’s budget proposals. 

Roles and Responsibilities

• Finance Minister: Responsible for presenting the budget, answering queries, and defending the budget proposals.
• Presiding Officers (Speaker of Lok Sabha and Chairman of Rajya Sabha): Ensure smooth conduct of budget discussions and votes.
• Members of Parliament: Participate in discussions, review the budget in committees, and vote on demands and bills.

Recent Budget (2024-25)

Theme and Allocation:

• Agriculture: Rs 1.52 lakh crore, focusing on sustainability and innovation.
• Defense: Rs 4.54 lakh crore, prioritizing modernization and self-reliance.
• Infrastructure: Rs 26,000 crore, aimed at boosting connectivity and growth.
• Health and Education: Increased focus on improving quality and accessibility.

Pros:

• Economic Growth: Increased infrastructure spending to boost economic activity.
• Agricultural Support: Significant allocation to support farmers and allied sectors.
• Defense Modernization: Enhanced budget for defense to improve national security.
• Social Welfare: Focus on health, education, and social schemes for inclusive growth.

The Union Budget is a cornerstone of India’s economic policy and governance. It encapsulates the government’s vision and strategy for the country’s development. The 2024-25 budget continues to focus on critical areas like infrastructure, agriculture, and defense while addressing social welfare needs. The process of budget formulation and passage underscores the principles of accountability and transparency in India’s parliamentary democracy.

Source- The Hindu 

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