How Is Budget Prepared? Here Are Key Things to Know

How Is Budget Prepared? Here Are Key Things to Know

Finance Minister Nirmala Sitharaman will present her second Union Budget in February.

The Union Budget for the financial year 2020-21 will be presented by Union Finance Minister Nirmala Sitharaman in February. The Union Budget is an annual financial statement of estimated receipts and expenditures of Government of India. Union Budget of 2020-21 will be the second full budget of the Prime Minister Narendra Modi's National Democratic Alliance (NDA) government after returning to power in May 2019. The first full Budget of second NDA government was presented by Finance Minister Nirmala Sitharaman in July 2019. The first full Budget of the NDA government had announced a TDS (tax deduction at source) of 2 per cent on cash withdrawals exceeding Rs 1 crore in a year and permitted filing of income tax returns using either Aadhaar or PAN.

Here are key things to know about Union Budget to be presented by Finance Minister Nirmala Sitharaman:

The Union Budget is prepared by the finance ministry in consultation with other Union government ministries. The finance ministry and officials meet and consult various industry associations and stake holders to understand their expectations from the Budget. The Finance Ministry comes up with an estimate of how much money is available to spend on plan schemes.

The Union Budget sets the tone of tax and expenditure proposals of the government of India for the full financial year. Salaried individuals keep a close eye on the Union Budget for any income tax amendments that may be announced in the Budget.

The Budget also proposes and enhances expenditure outlay of various welfare schemes run by the government of India such as Mahatma Gandhi National Rural Employment Guarantee Scheme, Ujjwala Yojna, Pradhan Mantri Awas Yojna, Swachh Bharat Mission, Atal Pension Yojna and others.

The ceremony of preparation of Union Budget starts with a traditional 'Halwa' ceremony wherein finance ministry officials involved in preparation of budget documents are required to stay in the ministry and remain cut off from their families till the presentation of the Budget by the finance minister in Parliament.

The President's recommendation is required to be obtained for introduction and consideration of Budget in Lok Sabha. The budget is presented in Lok Sabha after President's recommendation.