formulation of indian union budget
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Formulation of Budget in India
Presented By:
Deepa NayakIndicus Analytics Pvt. Ltd.
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Origin
Derived from French word ‘Bougette’ meaning “Sack or Pouch”.
Bag used by the British chancellor to keep his papers to be presented to the parliament.
Present sense of the term was used for the first time in 1873.
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History of Budget - India
First Budget presented in 26th November 1947 by finance minister Sir R K Shanmugam Chetty.
Plural Budget – Railway and General Budget
1921- Separation of Railway budget from General Budget on the recommendation of Acworth Committee.
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Budget Types
I. Line item or traditional or incremental Budgeting :
Budget in terms of object-wise (line item) classification.
II. Performance Budgeting : Emphasizes purpose of expenditure
rather than the items of expenditure.
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Budget Types …contd..
III. Programme Budgeting (PPBS): Selecting the best out of a number of available programmes.IV. Zero Based Budgeting (ZBB): Opposite of incremental budgeting. Departmental demands are
reviewed comprehensively and all expenditure are approved.
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Outcome Budget
"Outlays do not necessarily mean outcomes.
The people of the country are concerned with outcomes….“ P Chidambaram
Introduced in Budget 2005-06 to measure the development outcomes of all major programmes.
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Formulation of Budget
Main Players
Ministry of FinanceAdministrative Ministries
Planning Commission
Comptroller & Auditor General
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Stages of Formulation
Stage I Preparation of Estimates – Sending Circulars by Finance ministry to different ministeries.
Particulars of the Form Actual figures of the previous year Sanctioned Budget estimates for current year Proposed estimates for next year Actual figures of current year Actual figures for the corresponding period of
previous year.
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Stages of Formulation…Contd.
Stage II Scrutiny & Consolidation of estimates by
Deptts. & Ministeries
Stage III Scrutiny by Finance Ministry Settlement of disputes
Stage IV Consolidation by the Finance Ministry Preparation of estimates of revenue
Stage V Approval of the cabinet
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Enactment of Budget - Stages
I. Presentation of Budget – Rule 213
II. General Discussion – 3 to 4 days
III. Voting on Demands for Grants
IV. Passing of Appropriation Bill
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Execution of Budget Implementation of the Budget after
enactment by Parliament
Executed by various ministeries/departments under control of Finance Ministry
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