The Ministry of Finance will launch the 2023-24 annual budget preparation exercise from Oct. 10 amid India’s economic recovery and recession fears in developed countries.
Next year’s budget will have to tackle the critical issues of high inflation, stimulating demand, creating jobs and putting the economy on a sustained growth path of more than 8%.
Earlier in the day, Finance Minister Nirmala Sitharaman said inflation was no longer “in red” and the government’s priority was now to create jobs and stimulate growth.
“Some of course are in red letters (priorities), others may not be. Those in red letters would of course be jobs, fair distribution of wealth and ensuring that India moves forward on growth.
“In this sense, inflation is not in red letters. I hope this will not surprise many of you. We have shown that in the last two months we are able to bring it to a manageable level,” she said.
This 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 the election year, the government introduces Vote on Account for the limited period. Usually, the budget is released until July.
“Pre-budget meetings chaired by the Secretary (Expenditures) will begin on October 10, 2022,” according to Budget Circular (2023-24) from the Economic Affairs Department’s Budget Division dated September 6, 2022.
“Financial advisers should ensure that the necessary details required in Schedules I to VII are entered correctly. Hard copies of the data along with the specified formats should be submitted for cross-checking,” the circular adds.
The budget estimates for 2023-2024 will be tentatively finalized after the end of the pre-budget meetings, he said, adding that the RE (revised estimate) meetings would continue until around mid-November 2022.
“All Ministries/Departments should submit details of Autonomous Bodies/Implementing Agencies, for which a dedicated corpus fund has been established. The reasons for maintaining them and requiring grant support, and why this one shouldn’t be liquidated, should be explained,” he said.
As part of a follow-up action to the national monetization pipeline, he said, departments could be required to explain progress in monetizing assets.
The 2022-2023 budget is expected to be presented on February 1 during the first half of Parliament’s budget session which usually begins the last week of January each year.
The current year’s budget projected a growth rate of around 7-7.5% in real terms, while the budget deficit was set at 6.4% of gross domestic product (GDP).
The government led by Prime Minister Narendra Modi has abandoned a colonial-era tradition of presenting the budget at the end of February. The then finance minister, Arun Jaitley, first presented the annual accounts on February 1, 2017.
With the preponation of the budget, ministries now receive their budgeted funds from the start of the fiscal year beginning in April. This gives departments more room to spend and gives businesses time to adjust to trade and tax plans.
Previously, when the budget was tabled in late February, Parliament’s three-step approval process ended in mid-May, weeks before the onset of the monsoon rains.
This meant that ministries would only start spending on projects from late August or September, after the monsoon season had ended.