The finance ministry will begin the exercise to prepare the annual budget for 2023-24 from October 10 against the backdrop of recovery in the Indian economy and fears of recession in developed countries. Next year’s budget will have to address the critical issues of high inflation, job creation, strengthening demand and steering the economy towards sustainable growth of 8 percent.
On Wednesday, Finance Minister Nirmala Sitharaman said inflation was no longer “red flagged” and the government’s priority was now to create jobs and boost growth. “Obviously some are red flagged (priorities), some may not be. Red flagged of course would be jobs, fair distribution of wealth and making sure that India goes on the path of growth. “In that sense, inflation is not a red letter. I hope that will not surprise many of you. We have shown in the last few months that we have been able to get it to a manageable level,” she said.
It will be the fifth budget of the Modi 2.0 and Sitharaman government and the last full budget before the general elections scheduled for April-May 2024. During an election year, the government presents Vote on Account for a limited time. The budget is usually approved by July. “The pre-budget meetings chaired by the Secretary (Expenditure) will commence on October 10, 2022,” said the Budget Circular (2023-24) of the Budget Department of the Ministry of Economy dated September 6, 2022.
“Financial advisers should ensure that the necessary particulars required in Annexures I to VII are properly entered. Hard copies of the data along with the prescribed formats should be submitted for cross verification,” the circular added. The budget estimates for 2023-24 will be tentatively finalized after the pre-budget meetings are completed, she said, adding that the RE (revised estimate) meetings will continue till about mid-November 2022.
“All Ministries/Departments should submit details of autonomous bodies/implementing agencies for which a dedicated corpus fund has been created. Reasons for their continuation and demand for subsidy support and why it should not be withdrawn should be explained,” it said. Following the National Monetization Pipeline action, she said departments may be asked to explain progress in asset monetization.
The 2022–23 budget is likely to be tabled on February 1 during the first half of Parliament’s budget session, which usually begins in the last week of January each year. The budget for the current fiscal situation envisaged a growth rate of about 7-7.5 percent in real terms, while the fiscal deficit was pegged at 6.4 percent of gross domestic product (GDP).
The government led by Prime Minister Narendra Modi has done away with the colonial-era tradition of presenting the budget at the end of February. The then Finance Minister Arun Jaitley presented the annual accounts for the first time on February 1, 2017. With the presentation of the budget, ministries are now allocated budget funds from the beginning of the budget year from April. This gives government departments more room to spend and gives companies time to adjust to business and tax plans.
Previously, when the budget was tabled in late February, the three-stage parliamentary approval process was completed sometime in mid-May, weeks before the onset of monsoon rains. This meant that government departments would only start spending on projects from late August or September, after the monsoon season was over.
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