Finally, Budget for the aam aadmi in 216 pages

NEW DELHI: Few processes in governance have greater mystery attached to them than the making of the annual budget. What starts as hectic parleys between various arms of the sprawling government machinery at the Centre and the states, and the finance ministry, towards the latter part of the calendar year, builds into a frenzy as the secretive process gains momentum and finality towards the end of the fiscal.

The budget speech itself is among the most closely followed events of the year. Little, however, is known about how the detailed financials of a gigantic enterprise gets compressed into a single document.
The veil of secrecy has just been lifted.

In a detailed 216-page document, the finance ministry has demystified both the product and the process. It traces the history of the budget, dejargonises it and outlines its intricate passage through a fiscal year.

“Budget is shrouded in mystery. Even in the whole text of constitution, if you try to find out the word budget, you will not get it,” said finance minister Pranab Mukherjee as he released the budget manual on Tuesday.
So, what is budget? Well, the constitution calls is the ‘annual financial statement’ and the details can be found in the article 112.

In his foreword to the manual the finance secretary Ashok Chawla writes that it is expected to ‘bring about greater transparency’ in budget making.

Indeed, deciphering the budget process has been a difficult process, though a cursory reading shows that over the years most details have been ferreted out.

That is what makes the document important—it puts all the information in one place for those interested. Sadly, you can never take bureaucratese out of an official document. In parts, the budget manual suffers from some of the same issues, such as needlessly complex language, as the budget.

It explains all the budget-related terms through a comprehensive glossary and outlines the key principles of the budget, such as it is made on a cash basis as opposed to accrual basis, a principle of accounting followed by companies, and that the rule of lapse says any unused funds are not available next year.

It lays bare the process of the budget and the role of the organisations involved. For instance, the RBI is closely involved in the debt management aspects of the budget.

The level of detail also makes it an important document for the budget division of the finance ministry and the other ministries and departments, laying down clearly the time line of the budget and the duties of various officers.
There is also a good bit of trivia in the document.

It tells you that India’s first budget was presented by James Wilson on 7 April 1860. At that time, India followed a 1 May to 30 April fiscal. The current system of April to March fiscal began in 1867. Interestingly, a government committee suggested in 1984 that India should shift to January to December fiscal, but government did not find enough benefit to justify the trouble.