Union Budget 2025: How the govt prepares for the nation’s financial blueprint

Union Finance Minister Nirmala Sitharaman is all set to present the Union Budget for the financial year 202526 on February 1 This marks her eighth consecutive budget presentation The previous years budget announced in July 2024 was based on the interim measures laid out in the Interim Budget of FebruaryThe preparation of the Union Budget is a lengthy and detailed process that requires months of hard work planning and consultations This process ensures that the government allocates money in the right areas to keep the economy moving forward and it also outlines how the government plans to earn money through taxes duties and other sourcesWhat is the Union budgetUnder Article 112 of the Indian Constitution the Union Budget is an official document that explains the governmentrsquos financial plans for the upcoming year It covers the revenues the government expects to earn and the expenditures it plans to make The Budget is important because it shows how the government will allocate funds for various projects such as infrastructure healthcare education and welfare programsHow is the Union Budget preparedStep 1 Initial planning and estimationThe preparation process starts months before the Budget is presented It typically begins in August or September of the previous year During this time the Ministry of Finance sends out guidelines to various ministries and state governments These guidelines are meant to help them make estimates about how much money they will need for the coming yearRevenue projections The government looks at how much money it expects to earn through taxes duties and other sources This helps determine if the government will have enough income to cover its planned expensesExpenditure requests Ministries then send their budget requests to the Finance Ministry outlining how much money they need for their projects and servicesStep 2 Reviewing the estimatesOnce all the estimates are in the Finance Ministry looks over them carefully to check for any mistakes inconsistencies or overlaps This ensures that resources are being allocated efficiently Itrsquos also at this stage that the budget deficit is calculatedmdashthe difference between what the government plans to spend and what it expects to earnStep 3 Consultation with stakeholdersThe Finance Minister and the Finance Ministry consult with various stakeholders including economists business leaders politicians and representatives from different industries These consultations are essential to ensure that the Union Budget addresses the needs of different sectors of society and promotes growth in important areas such as agriculture infrastructure and manufacturingStep 4 Cabinet review and final approvalOnce the budget has been drafted it is presented to the Union Cabinet The Cabinet reviews the Budget to make sure it fits with the governmentrsquos overall economic plan Any necessary changes or adjustments are made before itrsquos approved by the Cabinet After this the Finance Minister gets ready to present the Budget to the ParliamentStep 5 Halwa ceremonyOne interesting tradition before the Union Budget is presented is the Halwa Ceremony This ceremony marks the official start of the printing process for the Budget documents The Finance Minister and senior officials gather to make halwa a sweet dish in a big iron pot It is a symbolic gesture that marks the end of the preparation phaseDuring this time all officials involved in preparing the budget enter a lockin period where they are cut off from the outside world to maintain confidentiality They cannot communicate with their families or anyone else until the Budget is officially presentedStep 6 Budget PresentationFinally on February 1 the Union Finance Minister presents the Budget in Parliament The Finance Ministerrsquos speech outlines the governmentrsquos spending plans tax proposals and key economic reforms for the year After the speech the Budget documents are shared with the public and Parliament members and discussions beginWhat to expect in Budget 2025This yearrsquos Budget is likely to focus on making taxes simpler and improving the new tax system It may also raise tax exemptions and make it easier for taxpayers to follow the rules The government could also prioritise increasing investments in important areas like infrastructure green energy and manufacturing while continuing to support social welfare programs