The Ministry of Finance will start the exercise to prepare the annual budget for 2023-24 from October 10, against the background of the recovery of the Indian economy and fears of a recession in developed countries.
Next year’s budget will have to address the critical issues of rising inflation, creating jobs, increasing demand, and putting the economy on a sustainable growth path of 8 percent.
On Wednesday, Finance Minister Nirmala Sitharaman said inflation is no longer a “red letter” and the government’s priority now is to create jobs and boost growth.
“Some of course (priorities) are in red letters, some may not. Of course the red letters will be jobs, a fair distribution of wealth, and making sure that India is on a path of growth.
“In this sense, inflation is not written in red letters. I hope it will not surprise many of you. We have shown that in the past two months we have been able to bring it to a manageable level,” she said.
It will be Modi’s government’s fifth 2.0 budget and Ms Sitharaman’s last full budget before general elections scheduled for April and May 2024.
During an election year, the government offers voting on account for a limited time. Usually the budget is liquidated until July.
“Pre-budget meetings chaired by the Secretary (Expense) will begin on October 10, 2022,” according to the Budget Bulletin (2023-24) of the Budget Division of the Department of Economic Affairs dated September 6, 2022.
The circular added, “The financial advisors should ensure that the necessary details required in Annexes I to VII are entered correctly. Hard copies of the data must be submitted with the specified formats for verification.”
She said the budget estimates for 2023-24 will be finalized provisionally after the completion of pre-budget meetings, adding that RE (Revised Estimates) meetings will continue until mid-November 2022.
“All Ministries/Departments shall provide details of the Independent Bodies/Implementing Agencies, for which a dedicated fund has been established. Reasons for its continuation and requirements for grant support, and why the matter itself should not be terminated shall be explained.”
She said that as a follow-up measure on the national asset monetization pipeline, there may be a need for administrations to explain the progress of asset monetization.
The 2022-23 budget is likely to be presented on February 1 during the first half of Parliament’s budget session which usually begins in the last week of January each year.
The current fiscal budget has projected a growth rate of between 7 and 7.5 percent in real terms, while the fiscal deficit has been fixed at 6.4 percent of GDP.
Prime Minister Narendra Modi’s government abolished the colonial era tradition of presenting the budget at the end of February. Then-Finance Minister Aaron Jaitley presented the annual accounts for the first time on February 1, 2017.
With the preparation of the budget, the budgeted ministries’ funds are now allocated from the start of the fiscal year starting in April. This gives government departments more room to spend, as well as allowing companies time to adjust to business and tax plans.
Previously, when the budget was presented at the end of February, Parliament’s three-stage approval process was completed sometime in mid-May, weeks before the monsoon rains began.
This means that government departments will only start spending on projects from the end of August or September, after the monsoon season ends.
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