The annual exercise of budgeting is a means for detailing the roadmap for efficient use of public resources. Although the Indian Constitution does not mention the term ‘Budget’, it provides that the Governor shall, in respect of every financial year, cause to be laid before the Legislative Assembly, a statement of the estimated receipts and expenditure of the Government for that year. This statement known as the ‘Annual Financial Statement’ is the main fiscal or budgetary document of the Government of Assam. Under Article 202(1) of the Constitution of India, an Annual Financial Statement showing the estimated receipts and expenditure of the State for every year is laid before the Assam Legislative Assembly. So much of the estimates of gross expenditure as is not charged upon the Consolidated Fund of the State under the various articles of the Constitution is submitted, in the form of Demands for Grants, to the Assembly which can discuss the estimates, assent, or refuse to assent, to any demand or to assent to any demand subject to reduction of the amount specified therein. So much of the estimates as relates to expenditure charged upon the Consolidated Fund of the State shall not be submitted to the vote of the Assembly but nothing in this clause shall be construed as preventing the discussion in the Assembly of any of those estimates. The duty of preparing these important estimates and proposals for grants is laid upon the Finance Department under paragraph 33(viii) of the Assam Rules of 1 Executive Business, 1968 framed under Article 166 of the Constitution and it is empowered to obtain from the Departments concerned materials on which to base its estimates.

The financial year for the Union and the State Governments in India is from April to March. Each financial year is, therefore, spread over two calendar years. The period of financial year as from April to March was introduced in India from 1867. Prior to that, the financial year in India used to commence on 1st May and ended on 30th April. Government of India appointed L.K. Jha Committee in May, 1984 to look into the issue of financial year. The Committee while recommending the commencement of financial year from January mainly with reference to the impact of South West monsoon on the economy, had mentioned in their Report that if for any reason, a changeover to the calendar year is not acceptable despite its many advantages, then on balance, it might be best to live with the existing financial year and avoid the problems of transition. Government of India did not favour any change in the financial year for some of the reasons which are brought out below:- i. The advantages arising out of the change would only be marginal in view of the innumerable considerations in the formulation of budget policies; ii. Change in the financial year would upset the collection of data and it might take a long time to return to normalcy in this regard; and iii. The change would create a large number of problems, as extensive amendments to tax laws and systems, financial procedures relating to expenditure authorisation and other matters would become necessary and in that process the administrative machinery would get diverted to problems of transition instead of concentrating on improving the tax collection machinery. Therefore, presently, the Financial Year for Government of Assam is from April to March in line with that for Government of India. 

A State Government budget is defined as a legal document that is passed by the Assembly and assented by the Governor. The two basic elements of any budget are the revenues and expenditure. Unlike a pure economic budget, Government Budget is designed for optimal allocation of scarce resources taking into account larger socio-political considerations. The main objective of Government financial management is to determine how well the financial and resource management responsibilities have been discharged. This is based amongst others, on a comparison of accomplishments against the fiscal policies and the time bound Government programmes. These fiscal policies and 2 programmes determine the Budget of the Government, through which the amounts of revenue to be raised and the allocation of sums for the respective Government programmes and purposes are set. Budgeting therefore, involves determining for a future time period on what is to be done and achieved, the manner in which it is to be done and the resources required for the same. It requires the broad objectives of the Government to be broken down into detailed work plans for each programme and subprogramme, activity and projects for each unit of the Government organisation. The Union Budget of India, also referred as the General Budget, is presented each year on the last working day of February by the Finance Minister of India to the Parliament. Similarly, the Budget of State of Assam is presented each year by the Finance Minister of the Government of Assam to the Assam Legislative Assembly. Budget preparation in the State is an iterative process between the Finance Department and the administrative Departments. It is a combination of top down approach with the Finance Department issuing guidelines or communicating instructions to spending Departments, and a bottom-up approach, wherein the spending Departments present requests for budget allocation. Some of the salient features of the Budget are as follows- 1. Budget is prepared on Cash Basis: Whatever is expected to be actually received or paid under proper sanction during a financial year (including arrears of the past years) should be budgeted in that year. 2. Lapse of Budget: All unutilised funds provided in the Budget lapse at the end of the financial year. 3. Realistic Estimation: It is essential that the provisions in the budget should be restricted to the amount required for actual expenditure. The Finance Department is interested in seeing that the Departments do not obtain more or less money than what they really need. If a Department is allotted funds which it does not need, it will deprive some other Department from getting the required resources. 4. Form of Estimates to Correspond to Accounts: It is essential that the form in the Budget Estimates correspond to that of Government accounts as it is from these accounts, that the performance of the Government is judged and the estimation for subsequent year made. If these are prepared in different forms, financial control will also become difficult. 5. Estimates to be on Departmental Basis: Each Department prepares estimates for receipts and expenditure separately. Generally one Demand or Grant is allocated in respect of each Department. In case of certain large Departments, more than one Demand for Grants is allocated in terms of General Financial Rules.