Budget 2026: From speech to statute: How the Union Budget becomes law

The Union Budget does not become law with the Finance Minister’s speech. It must first pass through Parliament’s detailed approval process. Behind every tax change and spending proposal lies a detailed constitutional process that decides whether the Budget becomes law. Understanding how the Budget is passed in Parliament reveals how India’s democracy exercises control over public money.

Process of getting the Budget passed in Parliament

Step 1: Presentation of the Budget

The process begins when the Finance Minister presents the Union Budget in the Lok Sabha, usually on February 1. This includes the Budget Speech, Finance Bill, Appropriation Bill, and supporting documents. From this moment, the government seeks Parliament’s approval to raise and spend money.

Step 2: General discussion

After presentation, Parliament holds a general discussion on the Budget. Members of Parliament debate the overall economic vision—growth, taxation, welfare, fiscal discipline without voting. This stage sets the political and policy tone of the Budget debate.

Step 3: Departmental scrutiny by committees

The Budget is then examined in detail by Department-related Standing Committees, which analyse the spending demands of individual ministries. These committees submit reports highlighting concerns, inefficiencies, and suggestions by bringing expert scrutiny beyond the main House.

Step 4: Voting on demands for grants

Next comes the most crucial stage: voting on Demands for Grants in the Lok Sabha. Each ministry’s expenditure is put to vote. Only the Lok Sabha has the power to approve or reject these demands.

Step 5: Appropriation bill

Once expenditure is approved, the Appropriation Bill is introduced to authorise withdrawal of money from the Consolidated Fund of India. Without this law, the government cannot spend a single rupee.

Step 6: Finance bill

The Finance Bill gives legal backing to tax proposals: income tax changes, GST-related amendments, and other levies. It must be passed by both Houses, with the Lok Sabha having final authority.

Step 7: Presidential assent

After Parliament passes both Bills, they are sent to the President for assent. Once signed, the Budget becomes law.

Why this process matters? 

This multi-stage process ensures accountability, debate, and democratic control over public finances, turning the Budget from a speech into binding policy.