The Union Budget is a constitutional concept, formally termed the Annual Financial Statement (AFS), as defined in Article 112 of the Constitution of India. It is the government's financial blueprint, detailing the estimated receipts and expenditure for the fiscal year, which runs from April 1 to March 31. The concept originated with the first budget presented in India on April 7, 1860, by James Wilson. The first Union Budget of Independent India was presented by Sir R.K. Shanmugham Chetty on November 26, 1947, establishing a mechanism for parliamentary oversight of government finances.
The mechanism requires the President to cause the AFS to be laid before both Houses of Parliament. Article 112 mandates that the expenditure estimates must separately show sums charged upon the Consolidated Fund of India and other proposed expenditure. The process connects to several key legislative instruments: the Appropriation Bill, which is required under Article 114 to authorize the withdrawal of funds from the Consolidated Fund of India, and the Finance Bill, which gives legal effect to the government's taxation proposals. The Lok Sabha holds the decisive authority over these money matters.
The process has seen significant recent changes: the Railway Budget was merged with the General Budget in 2017. Also in 2017, the presentation date was advanced from the last working day of February to February 1 to ensure the Budget is implemented before the new financial year begins. The time of presentation was changed from 5 PM to 11 AM starting with the 1999 Budget.