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Budget Making Exercise in a Federal Set up

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Within the Five-Year Plan for each year an Annual Plan is drawn up detailing the plan of action during the year. Around October-November every year Planning Commission circulates a detailed proforma to the Central Ministries and State Governments requesting for information on the progress made in implementing plan schemes and the allocation proposed for implementing the schemes in the ensuing plan year. On receipt of the information the Central Ministries are invited to the Planning Commission to discuss their proposals after which the head of the subject division in the Planning Commission and the nodal officer representing the Ministry sign a statement showing the plan outlay for the year. Once this exercise is completed the consolidated Statement of Plan outlays of all Central Ministries is forwarded to the Ministry of Finance which earmarks the planned allocation for the respective Ministries at the time of announcement of the Union Budget in February every year. There may only be minor variations in the approved outlay of Planning Commission and the financial allocation made by the Ministry of Finance.

As regards the State Governments, the consolidated proforma forwarded by the Planning Commission is filled in and forwarded to the Planning Commission. The State Plan Division in Planning Commission circulates the proposals to the respective Subject Divisions for comments on the State Plan proposals. This is followed by Working Group meetings between the Subject Division Head and the officers implementing the scheme/subject in the State after which the Subject division head recommends the outlay proposed for a respective subject say, agriculture, social welfare etc to the State Plan Division. The Working Group meetings are followed by Wrap-Up meeting chaired by the Member in charge of a State with the State Government officers either on the same day or the next day to finalise the outlays. Once the plan proposals of the State are discussed then the Briefing meeting is held between the Deputy Chairman of Planning Commission and the Chief Minister of the concerned State wherein the Annual Plan outlay for the State is announced.

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