Budget 2024

Before the beginning of every financial year, the government of India prepares a budget. According to Article 112 of the Indian Constitution, the Union Budget is a statement of the estimated expenditures and receipts of the government for the upcoming financial year. In other words, it lays out fiscal roadmap for the country for the next 1 year.

When does budget making begin

Budget-making process starts in August-September every year, that is, about 6 months prior to the date of its presentation. It needs to be passed by both houses of Parliament before the beginning of the financial year, that is, April 1 every year.

Pre-budget consultations

Few months before the budget, the finance minister starts conducting pre-budget consultations with various stakeholders to know about their proposals and demands. These stakeholders include bankers, agriculturists, economists, members of trade union, state representatives, industrialists, representatives from various ministries and more.

After going through all recommendations presented by these stakeholders, the finance ministry allocates revenues to various departments for their future expenditures. The finance minister takes the final call on all the demands. It is also discussed with the Prime Minister before presenting in Parliament.

Budget documents

At the time of presenting the budget, certain key documents are tabled in the Parliament which include annual financial statements (AFS), demand for grants (DG) and Finance Bill.

Along with it some explanatory statements are filed for ready reference. These include expenditure budget, receipt budget, expenditure profile, budget at a glance, memorandum explaining the provisions in the Finance Bill, and output outcome monitoring framework.

What does budget focus on

Apart from providing estimates of revenues and expenditures for various departments, the Union Budget seeks to allocate funds to them for the coming fiscal.

In addition, the growth projections given by the finance minister, after taking into account the current status of economy and factors responsible for it, is a key figure that people look up to. Like last year, the budget sought to complement macro-economic level growth with a focus on micro-economic level all inclusive welfare.

Besides growth estimates, the budget gives projections and allocations for various sectors as well. It gives outlays for construction of new infrastructure in the country, in terms of railways, highways, waterways, airports, logistics infrastructure and more.

New allocations are also made for agriculture sector, which is one the main contributors to India's GDP. Farmers get fresh provisions for procurement of wheat, paddy. Besides, chemical-free natural farming is an area that has been given immense significance in the past few budgets.

The micro, small and medium enterprises (MSMEs) sector has also been one of the prime focus of the government in the past few years. Skill development among youth and experienced class has also been a key objective of the Centre with a few to empower citizens to skill, reskill or upskill themselves.

After battling Covid-19 pandemic for over 2 years now, the healthcare sector has been under prime focus. An open platform for National Digital Health Ecosystem was decided to be rolled out in previous budget.

With Centre's 'Housing for All' scheme, real estate sector receives a good boost in the budget every year. Further, banking and financial services and telecom, also receive prime allocations.

In the previous 2 budgets, defence sector has received the highest allocations. Last year, the overall expenditure was pegged at 4.4% higher than previous fiscal's revised estimates and 9.8% over the budgetary estimates.

Amid increased focus on net zero transmissions, energy transitions and climate action is also one of the key areas with respect to which the Centre is expected to make allocations this year as well.

Tax regime

To take forward the policy of stable and predictable tax regime, the Centre has been introducing many measures to establish a trustworthy tax structure.

In order to further simplify the tax system and reduce litigation, provisions were introduced for filing new updated returns on payment of additional tax that will enable the taxpayer to declare income missed out earlier.

The new concessional tax regime introduced in the budget 2 years back offers an individual the option to choose lower tax rates in lieu of forgoing certain tax exemptions and deductions. Some of these benefits include standard deduction, exemption towards house rent allowance, leave travel allowance, house property loss, and deduction towards provident fund contributions and life insurance premiums.

With TOI's income tax calculator, users can find out which tax regime would be suitable for them and how much tax amount would they be liable to pay under both.