A government budget is the forecast of a nation's financials. The budget details estimated expenditures and revenues for the course of the upcoming fiscal. But apart from just being the annual statement of the financials for the government, it is also a document that can set out several other functions. A capital, union, or government budget has a significant impact on the nation's economy.
It is for this reason that various governments adopt various procedures when making their own respective budgets.
The Union Budget or the Annual Financial Statement, as Article 112 of the Constitution calls it, is made over a period of six months with the Budget Division of the Department of Economic Affairs (DEA) under the Ministry of Finance taking the main responsibility for it. Through consultation, review and revisions the final budget, along with the accompanying finance bill is presented by the Finance Minister to the Parliament for discussion and approval.
There is a large amount of similarity between the Indian and UK systems for making the budget since the former adopted many of the practices of the latter. However, one key difference is that the executive branch has a lot more control over the finer details of the budget, since they are not discussed in the Parliament but only by the Cabinet. When the Chancellor of the Exchequer presents the budget in the Westminster Palace, the focus is only on the taxation and the state of the economy.
Germany’s budget is perhaps one of the most different among modern advanced economies as it has unusually strict restraints on government borrowing. The nation is also unusually reliant on countercyclical taxes and reserves. Most of the reasoning behind these practices are a result of Germany’s numerous run-ins with high inflation and even hyperinflation. The budget plan details the expenditures and receipts of the current year, a draft for the next year and estimates for the next three years after that.
United States of America
The budget in the US is under the direct responsibility of the President, under whose direct jurisdiction the Office of Management and Budget prepares the budget. The budget almost entirely deals with just expenditure and not revenue. The proposals of the budget are sent to the House of Representatives, where the House Committee on Appropriations sends it to its various subcommittees for review. The budget as a whole is not scrutinised in the United States House of Representatives or the United States Senate.
First Published: IST