On February 1 each year, the Finance Minister rises in the Lok Sabha with a speech that moves markets, reshapes taxes and sets the government’s spending for the year. But the Budget is not written in January – it is the product of a five-month process wrapped in secrecy rituals that date back decades, from the halwa ceremony that locks officials inside the Finance Ministry to the printing of documents under guard. Here is how India’s Union Budget is actually made.

September to November: the ministries make their case

The process begins in autumn. The Budget Division of the Department of Economic Affairs issues a circular to all ministries, asking for their estimates: what they spent this year, what they need next year, and what new schemes they propose. Simultaneously, the Finance Ministry holds pre-budget consultations – with industry bodies, farmer groups, economists, trade unions and state finance ministers – gathering demands that range from tax cuts to subsidy hikes. The Revenue Department separately begins its tax homework: reviewing collection trends, studying proposals for new taxes or reliefs, and modelling their revenue impact. By November, the broad contours – the likely fiscal deficit target, the revenue assumptions – start taking shape in the Finance Minister’s office.

December to January: numbers, secrecy and the halwa ceremony

The final stretch is conducted under extraordinary secrecy. About a fortnight before the Budget, the traditional halwa ceremony is held in the Finance Ministry: a large kadhai of the sweet dessert is served to the officials and staff who will prepare the documents, marking the beginning of their “quarantine.” From that day until the speech, around a hundred officials are locked inside the North Block – cut off from families, phones monitored, movement restricted – to prevent leaks of market-sensitive tax proposals. The Budget is printed in a dedicated press in the North Block basement under Intelligence Bureau supervision; until 2021 the documents were voluminous printed volumes, and the shift to a paperless digital Budget has reduced but not eliminated the security theatre. Secrecy matters because a leaked tax change could trigger massive market manipulation.

Budget day: the speech and the documents

On February 1 – moved from the colonial-era February 28 slot in 2017 so that spending could begin with the financial year – the Finance Minister presents the Budget in two parts: the general economic statement and the tax proposals. The speech, usually 90 minutes to two hours, is watched live by millions and parsed word by word by markets. It is tabled alongside a stack of documents: the Annual Financial Statement (the constitutional core, showing receipts and expenditure), the Finance Bill (containing the tax changes that need Parliament’s approval), the Expenditure Budget, the Receipts Budget, and the Economic Survey’s companion volume, the Fiscal Policy Strategy Statement. The stock market stays open on Budget day – a special trading session – because the speech routinely moves indices by hundreds of points.

After the speech: Parliament decides

Presentation is the beginning, not the end. The Budget goes through general discussion in both Houses, scrutiny by departmental standing committees, and voting on demands for grants – Parliament’s formal approval of each ministry’s spending. Cut motions allow the opposition to challenge specific allocations. The Finance Bill, which carries the tax proposals, must be passed – and it is here that amendments sometimes soften the Budget’s edges. The entire process must conclude before the financial year begins on April 1; until then, the government spends under a vote on account if needed. What emerges is the legal authority for every rupee the government will collect and spend – the reason the months of secrecy and ceremony matter.

FAQs

Why is the Budget presented on February 1?

Since 2017, to give Parliament time to pass the full Budget before the financial year starts on April 1. Earlier, the February 28 date meant spending authorisations spilled into the new year.

What is the halwa ceremony?

A traditional ceremony where halwa is served to Finance Ministry staff before they are sequestered to prepare the Budget documents in secrecy until presentation day.

What is the difference between the Budget speech and the Finance Bill?

The speech announces intentions; the Finance Bill is the legislation that actually changes tax law and must be passed by Parliament to take effect.

Compiled by the Khabar 24h Editorial Desk from publicly available sources.