The Union Budget of India is the annual financial statement presented by the government of india, detailing its expected revenues and expenditures for the upcoming financial year. The budget is not just numbers; it reflects the government’s policy priorities, economic vision, and socio-economic plans for the country.

Here’s a detailed look at how India’s budget is made in 2026.

1. Budget Preparation Starts Months in Advance

The process of making the budget actually begins 8–10 months before the budget day. The Ministry of Finance, specifically the Department of Economic Affairs, coordinates the entire process.

Key steps:

· Departmental budget calls: All ministries and departments of the government are asked to submit their expenditure proposals for the next financial year (April 1 – march 31).

· Review by Finance Ministry: The proposals are reviewed to check if they fit within the government’s revenue expectations.

· Expenditure prioritization: Ministries must justify why they need funds and propose programs data-aligned with government priorities.

2. Economic survey – A Preview of the Budget

Before the budget is presented, the Economic Survey is released, usually in January.

Purpose:

· Gives a detailed overview of India’s economic performance in the past year.

· Highlights key challenges and opportunities.

· Sets the tone for the budget priorities, like healthcare, infrastructure, education, or defense.

Think of it as a report card for the economy that helps lawmakers and the public understand the financial situation.

3. Budget Approval by Finance Ministry

Once all proposals are submitted:

1. The Finance Ministry reviews the total expenditure against expected revenue (taxes, duties, non-tax revenue, etc.).

2. Revenue sources are estimated: income tax collections, GST, customs duties, and other government income.

3. Any gap between revenue and expenditure is planned to be filled by borrowing (from domestic or international sources).

At this stage, tax proposals for the coming year are also drafted.

4. cabinet Approval

After the Finance Ministry finalizes the draft:

· It is sent to the Union Cabinet for approval.

· The cabinet discusses the major policy priorities and the final numbers.

· Only after cabinet approval, the budget is ready to be presented in Parliament.

5. Presentation in parliament – Budget Day

· The Finance Minister presents the budget in the Lok Sabha (House of the People).

· This usually happens on february 1st each year (as of recent years).

· The presentation includes:

o Revenue Budget: Expected income from taxes and other sources.

o Expenditure Budget: Expected spending on various sectors.

o Fiscal deficit: The gap between revenue and expenditure.

o Policy announcements: New schemes, tax reliefs, or reforms.

Two Key Parts of the Budget

1. Revenue Budget: Shows revenue and expenditure related to normal government operations.

2. Capital Budget: Shows investment and borrowing plans.

6. Discussion and Approval by Parliament

Once presented, the budget undergoes a rigorous discussion in Parliament:

1. General discussion: Members discuss the budget without voting on each line item.

2. Departmental scrutiny: Parliamentary committees examine ministry-wise allocations in detail.

3. Voting on demands for grants: Each ministry’s budget is voted on separately.

4. Passing of Finance Bill: After discussion, the Finance Bill is passed.

o This bill gives legal authority to collect taxes proposed in the budget.

Finally, the President of india gives assent, making the budget official.

7. Implementation of the Budget

Once the budget is approved:

· Funds are released to ministries according to approved allocations.

· government schemes and projects are funded and executed.

· The Controller General of Accounts (CGA) monitors fund utilization to ensure money is spent as planned.

8. Monitoring and Mid-Year Review

· During the year, the government monitors spending and revenue collection.

· Sometimes, a Mid-Year Economic Review or Supplementary Demand for Grants is presented if actual revenue or expenditure differs from estimates.

Key Takeaways About India’s Budget

· It is both a financial and policy document.

· It reflects the government’s priorities: economic growth, welfare, and fiscal discipline.

· It is scrutinized by Parliament, experts, and the public before implementation.

· The budget process ensures transparency, planning, and accountability in managing public money.

 

Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.