The Finance Ministry on Monday initiated the exercise for presentation of fiscal year 2024-25 Budget through issuance of a circular. Though the circular has not mentioned whether it will be full-fledged Budget or interim Budget, indication is that there will be interim Budget. However, like previous occasions, the interim Budget could see some announcements.
As a matter of practice, the Budget (full-fledged except election year and interim in election year) is presented on February 1.
“The Budget Estimates for 2024‐25 will be provisionally finalised after completion of pre-Budget meetings. They shall commence from second week of October 2023 and shall continue till around mid‐November,” the Circular said. Further, it mentioned that issues such as requirement of funds for all categories of expenditures along with receipts of Ministries/ Departments, receipts of Departmentally run commercial undertakings, which are netted against the gross expenditure, non‐Tax revenues including arrears of Non‐tax revenue and indicative budget figures will be discussed on net basis.
Provisional ceilings for expenditure finalised during pre‐Budget meetings would be communicated to the Ministries/Departments. Financial advisors should ensure data entry in the UBIS (Union Budget Information System) on the basis of the provisional ceilings communicated by the Budget Division. Final ceilings will be decided separately by the Ministry of Finance latest by last week of December after assessment of fiscal space.
As on date, Union Budget prescribes expenditure under 102 Demands for Grants related with 56 Central Ministries and Departments. Actual expenditure during first six months by these Ministries becomes base for Revised Expenditure, while expenditure of 9 months on a financial year helps in finalising Budget Estimate for next fiscal year.
Repayment of dues
According to the circular, it has been observed that there are cases of delayed repayment of principal and interest amount of loans and advances provided by/through Centre to States/UTs/State Agencies. “Ministries/Departments are, therefore, requested to ensure timely repayment of GoI dues/loans from various entities like foreign governments/States/UTs/State agencies. Further it is requested to review the status of repayments/recovery of GoI dues on quarterly basis,” it advised.
Article 112 of the Constitution prescribes presentation of Annual Statement of Accounts, better known as Union Budget by the elected government in the Centre. Technically speaking, an elected government can present 6 budgets in its 5 years term. Rules do not prohibit an elected government to make announcement or new policy in an interim Budget, provided the Election Commission has not announced the Budget or the government has not lost confidence on the floor of the house.
It is the convention which stops government going into poll to make any new policy announcement in the interim Budget and restrict to seeking approval from Parliament for spending during first three months of the fiscal. However, both NDA and UPA government have gone against the convention and announced new policies.
For example, interim budget in 2019 by Modi 1.0 announced Pradhan Mantri Kisan Samman Nidhi, Pradhan Mantri Shramyogi Mandhan Yojana and full tax rebate for individual taxpayers having taxable annual income up to ₹5 lakh. Similarly, Manmohan Singh 2.0 government announced ‘One Rank-One Pension’, subsidy on education loan and lowering the excise duty on cars.