UPSC Prelims 2010 Q77: Indian Economy – Fiscal Policy & Budget
Which one of the following is responsible for the preparation and presentation of Union
Budget to the Parliament?
- (a) Department of Revenue
- (b) Department of Economic Affairs
- (c) Department of Financial Services
- (d) Department of Expenditure
Answer: (b) Department of Economic Affairs
Explanation
Who prepares and presents the Union Budget
Within the Ministry of Finance, a specific department handles the Budget-making process.
| Option | Verdict | Reason |
|---|---|---|
| (a) Department of Revenue | Incorrect | This department deals with tax policy and administration, not overall Budget preparation |
| (b) Department of Economic Affairs | Correct | The Department of Economic Affairs (DEA) is responsible for preparing and presenting the Union Budget to Parliament |
| (c) Department of Financial Services | Incorrect | This department oversees banking, insurance, and financial institutions, not Budget preparation |
| (d) Department of Expenditure | Incorrect | This department deals with government expenditure management, a component of, but not the overall preparer of, the Budget |
Ministry of Finance structure:
| Point | Detail |
|---|---|
| Budget preparation/presentation | Department of Economic Affairs |
| Tax policy | Department of Revenue |
| Expenditure management | Department of Expenditure |
| Banking/insurance | Department of Financial Services |
Answer: (b) Department of Economic Affairs.
Why each option is right or wrong
- (a) Incorrect. The Department of Revenue focuses on tax matters, not overall Budget preparation.
- (b) CORRECT. The Department of Economic Affairs is responsible for preparing and presenting the Union Budget.
- (c) Incorrect. The Department of Financial Services oversees banking/insurance, unrelated to Budget preparation.
- (d) Incorrect. The Department of Expenditure manages government spending, but is not the overall Budget preparer.
Key point
The DEPARTMENT OF ECONOMIC AFFAIRS, within the Ministry of Finance, is responsible for preparing and presenting the Union Budget to Parliament.
Remember
Department of Economic Affairs: responsible for preparing and presenting the Union Budget to Parliament.
Common mistakes
- Confusing the Department of Expenditure's spending-management role with overall Budget preparation.
- Mixing up the Department of Revenue's tax focus with Budget-making responsibility.
- Not knowing the specific departmental structure within the Ministry of Finance.
Exam tip
Union Budget preparation/presentation = Department of Economic Affairs. Revenue, Expenditure, and Financial Services departments handle narrower, specific functions.
Sources
- Ministry of Finance, Government of India — Department of Economic Affairs, Budget Division: Budget Manual
- Government of India (Allocation of Business) Rules, 1961 — Department of Economic Affairs (Budget)