What is Budget?

A budget is a financial plan that shows estimated receipts and proposed spending. This applies to an upcoming financial year. The Union Budget of India is the central government’s budget. State governments also prepare budgets. India’s Constitution does not use “Budget.” Instead, Article 112 refers to it as the “Annual Financial Statement.

What is Union Budget 2026?

Union Budget is a statement of the estimated receipts and proposed expenditures of the Government for an upcoming financial year i.e. a period that runs from 1st April to 31st March of the ensuing year.

• Union budget serves as a comprehensive financial plan that reflects the economic strategy and policy priorities of the Government.
• Budget is formulated and enacted annually by the Union Government as well as State Governments.
  • The Budget of the Union Government is called the Union Budget, and the Budget of the State Government is called the State Budget.

Note: The Indian Constitution does not use the term “Budget”. Instead, Article 112 of the Constitution uses the phrase “Annual Financial Statement” for the same.

Union Budget 2026 Date

Since 2017, when late Finance Minister Arun Jaitley introduced the practice of presenting the Union Budget on 1 February, all regular budgets have followed the same schedule. For the first time, 1 February falls on a Sunday. The Union Budget 2026 will be presented at 11 AM.

The Budget Session 2026 will be conducted in two phases, as approved by President Droupadi Murmu.

Budget 2026 Session Dates

President Droupadi Murmu has approved the convening of the Budget Session 2026. The key dates of the session are listed below.

Components of Union Budget

The Union Budget of India or the Annual Financial Statement encompasses three primary components:

• Budget Estimates of receipts and expenditures for the upcoming fiscal year (also known as the Budget Year).
• Revised Estimates of receipts and expenditures for the current fiscal year.
• Provisional Actuals of receipts and expenditures for the previous fiscal year.

Constitutional Provisions Related to the Union Budget

Regular Budget vs Interim Budget

Stages in Enactment of Budget 2026

The Union Budget 2026 process in India goes through the following six stages in the Indian Parliament:

1. Presentation of Budget
2. General Discussion
3. Scrutiny by Departmental Committees
4. Voting on Demands for Grants
5. Passing of Appropriation Bill
6. Passing of Finance Bill

All these stages of the budgetary process in India have been discussed in detail in the sections that follow.

Presentation of Budget 2026

The budgetary process in India begins with the presentation of the Union Budget. Traditionally, the Budget was presented on the last working day of February, but since 2017, it has been presented on 1 February.

The Budget may be introduced in one or more parts, and each part is treated as a full budget. No discussion takes place on the day of presentation.

Budget Speech 2026

The Finance Minister presents the Budget through the Budget Speech in the Lok Sabha. After the speech, the Budget is laid before the Rajya Sabha, marking an important step in the process.

Presentation of Economic Survey 2026

The Economic Survey 2026, prepared by the Ministry of Finance, reviews the country’s economic performance. It is usually tabled in Parliament one or a few days before the Budget. Earlier, it was presented along with the Budget.

Budget 2026 General Discussion

After the presentation of the Budget, Parliament moves to the General Discussion stage. This discussion is held in both Houses and usually continues for three to four days. Members debate the Budget as a whole and its key principles. The Finance Minister replies at the end. No cut motions are allowed and the Budget is not put to vote at this stage.

Budget 2026 Scrutiny by Departmental Committees

Once the General Discussion ends, both Houses are adjourned for about three to four weeks. During this period, the 24 Departmental Standing Committees examine the Demands for Grants of various ministries in detail. They prepare reports and submit them to Parliament for further consideration.

Budget 2026 Voting on Demands for Grants

After reviewing the committee reports, the Lok Sabha votes on the Demands for Grants. A Demand becomes a Grant once approved by the House.

Budget 2026 Key points

• Demands are presented ministry-wise.
• Only the Lok Sabha can vote on them.
• The Rajya Sabha has no voting power in this matter.
• Each Demand is voted on separately.
• Voting applies only to the votable part of the Budget.
• Expenditure charged to the Consolidated Fund of India can be discussed but not voted upon.

Budget 2026 Cut Motions

During the budget process, the Lok Sabha examines the Budget in detail before voting. Members may move Cut Motions to reduce the amount requested under any Demand for Grants. There are three types of Cut Motions, explained below.

Guillotine

On the last day fixed for discussion, the Speaker of the Lok Sabha puts all remaining Demands for Grants to vote at once, even if they have not been discussed. This procedure is known as the guillotine.

Budget 2026 Passing of Appropriation Bill

The Constitution provides that no money can be withdrawn from the Consolidated Fund of India without legal approval through an appropriation. Therefore, after the Lok Sabha passes the Demands for Grants, Parliament introduces the Appropriation Bill to authorise the withdrawal of funds.

This Bill covers:

• Grants voted by the Lok Sabha, and
• Expenditure charged on the Consolidated Fund of India.

No amendment can be made to change the amount or purpose of any grant or charged expenditure. After Parliament passes it and the President gives assent, the Bill becomes the Appropriation Act, which legally permits government spending.

Vote on Account

The government cannot withdraw money until the Appropriation Act is passed. However, since the full budget process usually continues beyond 31 March, the government needs temporary funds to meet regular expenses.

To address this, the Constitution allows the Lok Sabha to grant advance funds for part of the financial year. This arrangement is called the Vote on Account.

Key points:

• It is passed after the General Discussion on the Budget.
• It usually covers two months and is about one-sixth of the total Budget estimate.
• In election years, it may be extended to three to five months.
• Since 2017, the Budget is presented on 1 February, allowing Parliament to pass the Appropriation Bill earlier and generally avoid a Vote on Account, except during election years when an Interim Budget is presented.

Passing of Finance Bill

The Finance Bill is introduced every year to implement the government’s financial proposals for the upcoming financial year. It may also include supplementary proposals for any part of the year. Once approved by Parliament and assented to by the President, it becomes the Finance Act.

The Finance Act gives legal effect to the revenue side of the Budget and completes the budget enactment process.

During the discussion on the Finance Bill, Members of Parliament may raise issues related to general administration, local concerns under the Union Government, and the country’s financial or economic policies.

Key Points

• The Finance Bill is treated as a Money Bill and follows the same procedure.
• Amendments to reduce or reject a tax can be moved, unlike in the Appropriation Bill.
• Under the Provisional Collection of Taxes Act, 1931, it must be passed and receive Presidential assent within 75 days.

Other Grants under the Budgetary Process

The Union Budget covers regular government spending for a financial year. However, in special or unforeseen situations, Parliament provides additional grants to meet extra or urgent expenses.

Types of Other Grants

Note: All grants except Token Grant follow the same procedure as the regular Union Budget.

Interesting Facts About the Union Budget

The Union Budget is one of India’s most awaited annual events, presented every year on 1 February to allow enough time for policy changes before the new financial year begins on 1 April. The word “Budget” comes from the French term bougette, meaning a small leather briefcase.

Several unique traditions surround the Budget. The famous Halwa Ceremony marks the start of the final preparation stage, after which officials remain isolated to maintain secrecy—a practice adopted after a Budget leak in 1950. In recent years, the Budget has gone paperless as part of India’s digital push.

Historically, Indira Gandhi was the first woman to present the Budget, while Nirmala Sitharaman holds the record for presenting the most Budgets by a woman. Morarji Desai presented the highest number overall. The first Hindi Budget was introduced in 1955, and the longest Budget speech was delivered by Sitharaman.

Over time, traditions have evolved. The presentation time shifted from 5 PM to 11 AM in 1999, and the date moved from the last working day of February to 1 February in 2017. The traditional briefcase has also been replaced by the Indian-style ‘bahi khata’.

The Budget is prepared mainly by the Budget Division of the Ministry of Finance, in consultation with NITI Aayog, various ministries, economists, and stakeholders. Overall, the Union Budget aims to address the needs of citizens, sectors, and states alike.

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