Government to start FY24 budgeting exercise on Monday

• The Budget Estimates for 2023-24 will be tentatively finalized upon completion of pre-budget meetings.
• It will be the fifth budget of the government of Narendra Modi 2.0 and the Minister of Finance Nirmala Sitharaman.
• The 2023-24 budget is likely to be presented on February 1 during the first half of Parliament’s budget session.

The government to Monday will kick off its annual fiscal exercise for fiscal year 2023-24, which is expected to look at measures to revive growth in a bleak global outlook. The meeting would begin with consultations with various ministries and departments on the revised estimate (RE) of current fiscal year expenditure and borrowing requirement for 2023-24.

On the first day on Monday, RE meetings with Ministry of Environment, Forest and Climate Change, Ministry of Labor and Employment, Ministry of Information and Broadcasting, Ministry of Statistics and Program Implementation and Ministry of Youth Affairs and Sports.

Most of these discussions to finalize the RE for the current fiscal year (2022-23) and the budget estimate for 2023-24 would be chaired by the Finance Secretary and expenditure secretary.

The one-month deliberations were to end on November 10, with consultations with the Ministry of Cooperation, the Ministry of Agriculture and Farm Welfare, the Ministry of Agricultural Research and Education, the Ministry of Road Transport and Roads, the Ministry of Railways and the Ministry of Petroleum and Natural gas, according to a notification from the Budget Department of the Ministry of Finance.

The budget estimates for 2023-24 will be provisionally finalized after the conclusion of pre-budget meetings.

These meetings would take place against the background of many institutions, including the Reserve Bank and the World Bank has lowered its growth forecast for India to 7 percent and 6.5 percent, respectively.

It will be the fifth budget of the government of Narendra Modi 2.0 and Finance Minister Nirmala Sitharaman and the last full budget before the general elections in April-May 2024.

During the election year, the government presents Votes on Account for the limited period. Usually the budget is approved until July.

The 2023-24 budget is likely to be presented on February 1 during the first half of Parliament’s budget session, which usually starts in the last week of January each year.

In the 2022-23 budget, growth of 7-7.5 percent was forecast in real terms, while the budget deficit was set at 6.4 percent of gross domestic product (GDP).

The government led by Prime Minister Narendra Modi scrapped the colonial-era tradition of presenting the budget at the end of February. The then Minister of Finance Arun Jaitley presented the annual accounts for the first time on 1 February 2017.

With the change in budget presentation date, ministries are now allocated their budgeted resources from the beginning of a fiscal year beginning in April. This gives government departments more leeway and gives companies time to adjust to business and tax plans.

Previously, when the budget was presented at the end of February, the three-stage approval process by Parliament would be completed sometime in mid-May, weeks before the monsoon rains started.

This meant that government departments would not start spending on projects until the end of August or September, after the monsoon season has ended.

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