Question

The initial processes of making the annual budget start in August–September, i.e., around six months prior to the budget presentation.

Identify the correct procedure of preparation of the annual budget by the Finance Minister.

• A. Step 1: Estimate expenditures and tax rates
  Step 2: Finalise the budget
  Step 3: Present budget in the Lok Sabha
  Step 4: Discussions and debates on budget
  Step 5: Implementation of budget
• B. Step 1: Estimate expenditures and tax rates
  Step 2: Implementation of budget
  Step 3: Present budget in the Lok Sabha
  Step 4: Discussions and debates on budget
  Step 5: Finalise the budget
• C. Step 1: Estimate expenditures and tax rates
  Step 2: Present budget in the Lok Sabha
  Step 3: Discussions and debates on budget
  Step 4: Implementation of budget
  Step 5: Finalise the budget
• D. Step 1: Estimate expenditures and tax rates
  Step 2: Implementation of budget
  Step 3: Discussions and debates on budget
  Step 4: Present budget in the Lok Sabha
  Step 5: Finalise the budget

Answer 1

The correct option is A Step 1: Estimate expenditures and tax rates

Step 2: Finalise the budget
Step 3: Present budget in the Lok Sabha
Step 4: Discussions and debates on budget
Step 5: Implementation of budget
The Finance Minister asks for estimates of expenditure from ministries, states, and union territories. Various industry groups and farmers also put forward their demands and views. The tax rates are also decided such that the poor are not burdened with high taxes but at the same time the revenue is enough to meet expenditures. After finalising the budget, it is presented in the Lok Sabha where it is discussed and debated in detail. Once the government gets the approval on the budget, it is then implemented in the next financial year.