World
India
Industries and taxpayers are eagerly awaiting the Union Budget 2025, anticipating changes and announcements from Finance Minister Nirmala Sitharaman. A government budget is more than just an annual statement of financials; it is a forecast of a nation’s financial future, detailing estimated expenditures and revenues for the upcoming fiscal year. Budgets also set out several other functions that significantly impact the nation’s economy. Here, we explore how various countries, including India, the United Kingdom, Germany, and the United States, approach their budgeting processes.
India
The Union Budget, or the Annual Financial Statement as per Article 112 of the Constitution, is a comprehensive document prepared over six months. The Budget Division of the Department of Economic Affairs (DEA) under the Ministry of Finance takes the main responsibility for it. Through consultation, review, and revisions, the final budget, along with the accompanying finance bill, is presented by the Finance Minister to the Parliament for discussion and approval. This process ensures that various stakeholders have input and that the budget reflects the nation’s economic priorities.
United Kingdom
The UK system for making the budget is similar to India’s, as the latter adopted many of the former’s practices. However, a key difference is that the executive branch in the UK has more control over the finer details of the budget, which are not discussed in Parliament but only by the Cabinet. When the Chancellor of the Exchequer presents the budget in the Westminster Palace, the focus is primarily on taxation and the state of the economy. This approach allows for more centralized decision-making and quicker adjustments to economic policies.
Germany
Germany’s budget is unique among modern advanced economies due to its strict constraints on government borrowing and reliance on countercyclical taxes and reserves. These practices stem from Germany’s historical experiences with high inflation and hyperinflation. The budget plan details the expenditures and receipts of the current year, a draft for the next year, and estimates for the next three years. This forward-looking approach helps maintain fiscal discipline and ensures long-term economic stability.
United States of America
In the US, the budget is the direct responsibility of the President, under whose jurisdiction the Office of Management and Budget prepares it. The US budget almost entirely deals with expenditure rather than revenue. The budget proposals are sent to the House of Representatives, where the House Committee on Appropriations divides it among various subcommittees for review. Unlike other countries, the budget as a whole is not scrutinized in the United States House of Representatives or the United States Senate, allowing for focused deliberations on specific expenditure items.
Anticipations for Union Budget 2025
As the Union Budget 2025 approaches, there is widespread speculation about potential changes that may be introduced to provide relief to various sectors of the economy. Key areas of interest include tax reforms, infrastructure spending, and measures to boost employment and economic growth. The government may also focus on supporting the middle class through tax relief and incentives, enhancing social welfare programs, and promoting sustainable development.
Finance Minister Nirmala Sitharaman’s announcements will be closely watched as they set the tone for India’s economic trajectory in the coming fiscal year. The budget’s impact will be felt across industries, with businesses and individuals eagerly awaiting the government’s plans for economic recovery and growth.
