India, one of the world’s top five economies, is set to present its Union Budget in Parliament on February 1 under the PM Modi–led government for the 15th time, with finance minister Nirmala Sitharaman presenting it as mandated under Constitution’s Article 112.However, February 1 was not always the date for presenting the Union Budget. For decades, it was traditionally presented on February 28. This long-standing ritual was amended in 2017, when the annual Union budget was presented on February 1, from then onwards it was fixed as the official date for its presentation.February 1 will mark the second full annual budget of the Modi 3.0 government. For Sitharaman, it will be her ninth consecutive Budget, making her second only to former finance minister Morarji Desai, who had also briefly served as prime minister.The Union Budget records the government’s accounts and financial transactions for a year, known as the “fiscal year” – a 12-month period used by governments and businesses for financial reporting. In India, the fiscal year runs from April 1 to March 31. The Budget lays out the government’s financial blueprint and is prepared by the finance ministry.The Lok Sabha enjoys the privilege of the passage of the Union Budget, as the Constitution gives the directly elected members of the Lower House the first right to its presentation and decisive authority over money matters and Money Bills.The Budget documents are later laid before the Rajya Sabha for discussion. However, the Rajya Sabha does not have the power to vote on or amend Money Bills, including the Budget; it can only discuss them and make recommendations.
What is the Union Budget?
The meaning of the Union Budget is defined in Article 112 of the Constitution, which states that the President allows the government’s “estimated receipts and expenditure” for the year. This is referred to as the “annual financial statement.”Broadly, the Union Budget is divided into two parts: the Revenue Budget and the Capital Budget.The Revenue Budget shows how much money the government earns and how much it spends. The money earned is called revenue receipts and comes from two sources, tax and non-tax income. Revenue expenditure is the money spent on the daily running of the government and on services for people. If the government spends more than it earns, it is called a revenue deficit.The Capital Budget refers to government’s money received and money spent on long-term purposes. Capital receipts mainly include loans taken from the public, foreign governments, and the RBI. Capital expenditure is the money spent on building roads, machines, buildings, hospitals, schools, and other development work. When the government’s total spending is more than its total income, it is called a fiscal deficit.
Importance
Union Budget is a key practice of government’s functioning in India, an unskippable practice that takes place every year, exceptions are those general elections-bound year, when Union Budget’s presentation gets divided in two — pre-polls the finance minister passes “Interim Budget” and then the new government’s finance minister passes final union budget. As it was last seen in 2024-2025 budget due to 18th Lok Sabha elections that was scheduled between April to June.The budget has serious implications for the economy. ITt lays out various financial goals that the government looks forward to achieving over a set period.Allocation of Resources – The preparation of the budget ensures the government’s choice of how it allocates resources optimally to fulfil various goals and objectives.The very essence of the resources allocations ensures public welfare and economic progress.The budget shows which sectors the government plans to support. The finance ministry-led government’s financial draft opens up on the restrictions or leniency for specific industry or sectors. It also serves as a signal for investors, who may choose to invest in industries receiving a government push. Overall, it reflects the direction in which the economy is headed.The budget also reflects on key issues such as direct and indirect taxes. Some of its provisions affect citizens directly in their day-to-day lives, while others have an indirect impact. The Union Budget helps people plan their finances better for the coming year.It decides income tax slabs and rates, along with deductions and the method used to calculate income tax.
Process of Union Budget
The entire Union Budget process begins with the President.President’s constitutional role – Under Article 87, the President addresses in a joint sitting of both Houses of Parliament — the Lok Sabha and the Rajya Sabha — at the start of the first session after a general election and at the beginning of the first session every year. This address sets the tone for the government’s agenda.What the President’s address says – The speech outlines the Union government’s policies, priorities, achievements, and plans for the year ahead. Although delivered by the President, it is prepared by the Union Cabinet.Motion of thanks – After the address, a “Motion of Thanks” is moved in both Houses. Members debate it and vote on it, formally acknowledging the President’s speech and the government’s roadmap.Where it takes place – With the new Parliament building, this joint sitting continues in the new chamber. The President’s role is crucial, as the office stands at the constitutional apex of both the executive and the legislature. The President’s prior recommendation is required for Money Bills, including the Budget, making this step essential to its presentation.
Rituals and traditions
Dahi-cheeni (curd and sugar)- Under President Droupadi Murmu, the custom of dahi-cheeni has gained renewed prominence. Finance minister Sitharaman met the President at Rashtrapati Bhavan on several occasions before presenting the Union Budget, where President Murmu offers dahi-cheeni as a cultural symbol of good luck and blessings for a successful Budget presentation.The halwa ceremony – Before documents of budget are printed and officials enter the confidential “lock-in” time period, the finance minister participates in the halwa ceremony..The bahi-khata (ledger) – The colonial-era briefcase seems to be a part of history now, finance minister Nirmala Sitharaman introduced the tradition of carrying Budget papers in a red, folded cloth called a bahi-khata.
