The Budget preparation process involves various stages and considerations to ensure effective allocation of funds and financial planning. Here's a breakdown of key components:
Article 112 and Annual Financial Statement (AFS): Article 112 of the Constitution of India mandates the presentation of the Annual Financial Statement (AFS), commonly known as the Budget, before the Parliament. The AFS comprises estimates of revenue and expenditure for the upcoming fiscal year. It includes the Consolidated Fund of India, Contingency Fund, and Public Account.
Demands for Grants: The AFS is divided into parts representing various Ministries and Departments. Each part contains Demands for Grants, which detail the estimated expenditure for different schemes, programs, and projects undertaken by each Ministry or Department.Totally,there are 102 demands for grants.
Revised Expenditure and Budget Estimate: The actual expenditure during the first six months by Central Ministries serves as the base for Revised Expenditure. Additionally, the expenditure of nine months of a financial year aids in finalizing the Budget Estimate for the next fiscal year.
Repayment of Dues: The circular highlights the importance of timely repayment of dues, such as principal and interest amounts of loans and advances provided by the Centre to States, UTs, and State Agencies. Ministries/Departments are advised to review repayment status quarterly and ensure timely settlement.
Pre-Budget Meetings: Pre-Budget meetings are conducted with Ministries/Departments to discuss requirements, receipts, expenditures, and revenue sources. Provisional ceilings for expenditure are communicated during these meetings, and financial advisors input data into the Union Budget Information System based on these provisional ceilings.
Finalizing Budget Ceilings: Final ceilings for expenditure are decided by the Ministry of Finance by the end of December. The assessment of fiscal space and consideration of various factors play a role in determining these final ceilings.
Interim vs. Full-Fledged Budget: While the circular doesn't explicitly state the nature of the Budget (interim or full-fledged), indications suggest it might be an interim Budget. Interim Budgets, often presented in general election years, may contain important announcements despite being a temporary financial plan.
The Budget preparation process is a comprehensive endeavor that involves careful analysis, financial planning, and coordination among various Ministries and Departments. It plays a crucial role in determining the allocation of resources and guiding the economic trajectory of the country.
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