Budget is a statement of estimated receipts and expenditure of the government in respect of every financial year.we can also understand the budget in a very simple way because it is prepared in every house in the beginning of every month.
As the government budget is a very broad concept. This comprise of
(1) Revenue budget
Stages Involved in Preparation of Indian Budget
Ministry of finance instructs ministers/department to formulate receipts and expenditure for the next year. Department/ministers prepare estimates which are scrutinized by the financial advisers and then interaction is made with the department of expenditure (finance ministry).
Estimates of tax revenue-field staff report, progress of collection are analyzed by TRU (tax research unit) and board of direct taxes/excise and custom. Estimates are prepared through interaction with the department of revenue and economic affairs based on performance of economy, industrial, production, import, foreign exchange reserves.
Public sector companies-Project progress, internal resources, commercial credits, budgetary support needs are discussed with planning commission which gives detailed instruction to central ministers to prepare estimates of development plan outlay and ultimately allocation are finalized in consultation with the ministry of finance after review of on going schemes.
Interaction with the state Interaction and interfaces – deputy chairman, planning commission, finance minister as well chief minister of state.
Industry ,trade and processional bodies submit memorandum .Discussions are held by finance ministry involving economists, scientists, industrialist ,farm lobbies, business associations , IMF and world bank.
Impact of suggestions are analysed by TRU (Tax Research Unit) and Fiscal unit interaction with all ministries .After that final estimates are prepared by the ministry of Finance.
Budget division works on revenue expenditure, Capital expenditure, gaps, addition taxes, duties, concessions, quick estimates of receipts and expenditure. Interaction with the cabinet and the prime minister through finance minister. Discussion are held on relief, subsidies, social schemes, internal and external borrowing. Final document are produced and ultimately budget is presented in the parliament after introduction of economy survey.