How is the Budget Prepared?

By BYJU'S Exam Prep

Updated on: November 9th, 2023

The Ministry of Finance prepares the Annual Budget after consulting with NITI Aayog and other relevant Ministries. The nodal organization in charge of creating the Budget is the department of economic affairs (DEA) of the finance ministry. The budget-making process starts in August or September, or around six months before the presentation date.

Preparation of Budget

It comprises a number of stages, including sending out circulars to all ministries, consulting on suggestions made, assigning monies, and conducting meetings to discuss individual budgets.

  • Later, the “halwa ceremony,” which officially kicks off the printing of Budget materials, is attended by the finance minister and other dignitaries.
  • The Lok Sabha is then presented with the budget by the Finance Minister.
  • First, the finance ministry circulates a notice asking all departments, states, Union territories, and independent organizations to prepare estimates for the following year.
  • Depending on which ministries express their demands, the circular then includes basic forms and essential instructions.
  • The ministries provide estimates and a breakdown of their previous year’s income and expenses.
  • After requests are submitted, they are carefully reviewed by senior government officials, and the departments of spending and ministries hold extensive discussions.
  • Following approval, the data is subsequently forwarded to the finance ministry.
  • Several departments receive funding from the finance ministry for their upcoming expenses once the ministry has reviewed all recommendations.
  • Before presenting the budget, the finance minister meets with various stakeholders to hear their wishes and suggestions.
  • These stakeholders consist of trade unions, bankers, farmers, and state representatives.
  • After pre-Budget discussions, the finance minister determines the final demand, which is then debated with the PM before being finalized.


How is the Budget Prepared?

The Ministry of Finance creates the Union Budget with the help and consultation of NITI Aayog and some other relevant ministries. Additionally, the nodal entity in charge of creating the Budget is the Budget division of the department of economic affairs (DEA) in the finance ministry.

Related Questions:

Our Apps Playstore
SSC and Bank
Other Exams
GradeStack Learning Pvt. Ltd.Windsor IT Park, Tower - A, 2nd Floor, Sector 125, Noida, Uttar Pradesh 201303
Home Practice Test Series Premium