The Union Budget 2025 is set to be presented on February 1, marking the eighth consecutive budget by Finance Minister Nirmala Sitharaman under the Modi 3.0 government. As the central government’s comprehensive financial roadmap, the budget outlines proposed expenditures and revenues for the fiscal year starting April 1, 2025, and ending March 31, 2026.
The annual budget, often referred to as the bahi-khaata since 2019, encapsulates the government’s fiscal, economic, income, and spending policies. Its preparation is a detailed and time-intensive process, commencing about six months before it is officially presented.
How is the Union Budget Prepared?
The groundwork for the Union Budget begins in September each year, starting with the Finance Ministry issuing a circular to all ministries and departments. This document provides clear instructions on revising estimates for the current year and preparing budget estimates for the upcoming fiscal year.
In response, ministries and departments submit revenue and expenditure receipts, which include details on central taxes and duties, as well as provisional budget estimates. These proposals are analyzed during pre-budget discussions, led by the Secretary (Expenditure), which typically begin in October.
During this stage, net budgetary ceilings for each ministry or department are finalized. Any disputes over allocations are resolved by the Finance Ministry in consultation with the Prime Minister or the Union Cabinet. Once resolved, provisional revenue ceilings are allocated to departments for their planned expenditures.
Behind the Scenes: The Final Touches
The Budget speech, a critical element of the presentation, is crafted with inputs from various government departments. Notably, the Budget papers are printed at the Finance Ministry’s own press, and entry is highly restricted in the months leading up to the presentation.
One of the most anticipated traditions during the budget preparation process is the halwa ceremony. Held annually, this event signifies the beginning of the “lock-in” process for officials involved in preparing the Budget. These officials remain sequestered to ensure confidentiality until the financial document is finalized.
Before the Budget is tabled in Parliament, it requires the President’s formal recommendations for introduction and consideration in the Lok Sabha. Following this, the Budget is presented on February 1, accompanied by the finance minister’s speech, which outlines the central government’s fiscal policies and priorities.
Why February 1 Matters
Since 2017, the Union Budget has been presented on February 1 to allow adequate time for its implementation before the start of the fiscal year on April 1. This shift has streamlined the government’s fiscal planning and ensured departments and ministries have clarity on their allocations and policies.
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