Finance Ministry Will Start The Budget Preparation Process

Finance Ministry will start the budget preparation process from October 16. The Finance Ministry will start the process of budget making for 2021-22 from October 16. A notification regarding this was issued on Thursday.

This will be the second term of the Narendra Modi government and the third budget of Finance Minister Nirmala Sitharaman. In the budget, measures will have to be taken to deal with issues like a decline in economic growth due to the COVID-19 crisis and a decrease in revenue collection.

According to the Budget Circular (2021-22) of the Budget Unit of the Department of Economic Affairs, ‘Meetings on Pre-Budget / Revised Estimates (RE) will start from October 16, 2020’. The circular states that all financial advisors should ensure that all the necessary details related to these meetings included in Appendices One to Seven are included in the RE module of the UBIS (Central Budget Information System).

The budget estimate for the financial year 2021-22 will be finalized after the completion of discussions with other secretaries and financial advisors of the Expenditure Secretary. The pre-budget meeting will start from October 16 and will continue till the first week of November. All ministries and departments are required to submit details of all autonomous bodies, for which a corpus fund has been created.

The budget for FY 2022 will also figure in the recommendations of the 15th Finance Commission, which is expected to submit its second and final report by the end of this month.

The Reserve Bank of India has reduced the repo rate by 225 basis points since the beginning of 2019, affecting the interest rates of fixed deposits. However, now the demand for such investment options is increasing rapidly in which returns are assured and returns are high.

In fact, risk-affected investors such as seniors depend on the monthly payment of their non-cumulative fixed deposits in the years following their retirement. In recent times, the reduction in FD interest rates is a cause of great concern for investors, as their FD returns may prove inadequate to meet various financial goals on time.

However, it may be beneficial to invest in a small finance bank for higher interest than FD returns, which are currently offering 2-4% higher interest rates than public and private banks. Want better returns on investment, these banks are giving up to 7.5% interest on fixed deposits