Google
''Hard work is like a staircase and luck is like a lift. Lift may fail but staircase is sure to take you to the top'' -- unknown

To be fearful when others are greedy, and be greedy when others are fearful -- warren Buffet

I am better investor because I am businessman,better businessman because I am no investor. -- Warren Buffet

2/21/2007

Budget: How the world prepares it?

United States

The Federal Budget process begins on the first Monday in February of each year and should be concluded by October 1, the start of the new Federal Fiscal. The process is initiated with the President submitting a proposed Budget to Congress. Congress is under no obligation to adopt all or any of the President's budget proposals and often makes significant changes. However, since the President must ultimately approve all future bills, the Congress is often reluctant to completely ignore the priorities of the President's budget.

The Congressional Budget Act requires passage of an annual "Congressional Budget Resolution", a concurrent resolution passed in identical form by both House and Senate, but not requiring the President's signature. Both House and Senate Budget Committees hold hearings on the annual Budget Resolution. The Budget Committees are required to present their final Budget Resolution for consideration by the full House and Senate by April 1. The full House and Senate now debate, amend, and take action on the Budget Resolution as reported to them by their respective Budget Committees. Agreed to by both House and Senate, it is approved by April 15.

As a vital part of the Budget Resolution, Congress must agree on "spending allocations" or limits on how much money can be spent on discretionary programmes during the following fiscal year and next five fiscal years. These spending allocations establish aggregate totals of money that cannot be exceeded by the House and Senate Appropriations Committees during the annual spending process. The House and Senate Appropriations Committees now take the total aggregate spending allocations from the Budget Resolution and divide the amount into thirteen "sub allocations". By June 10, the full House and Senate should begin consideration of the annual spending bills.

The Budget Act stipulates that the House should have given final approval to all 13 spending bills by June 30. All 13 spending bills are then signed by the President and become Public Laws by October 1, the start of the new Fiscal Year,


Japan

Japan's annual budget is adopted through a parliamentary/cabinet system. Unlike in the United States, where the Congress has constitutional authority over formulation of the budget, in Japan that authority is bestowed upon with the Prime Minister's cabinet. The budgetary process generally begins soon after the start of a new fiscal year on April 1. All ministries and government agencies prepare budget requests in consultation with the Policy Research Council. In the fall of each year, Budget Bureau examiners revie these requests in great detail, while top Finance Ministry officials work out the general aspects of new budget and the distribution of tax revenues.

During the winter, after release of the ministry's draft budget, campaigning by individual Diet members for their constituents and different ministries for revisions and supplementary allocations become intense. The coalition leaders and Finance Minsitry officials consult on a final draft budget, which is generally passed by the Diet in late winter.

Thus, when the budget document is submitted to the Diet during the end of January, it is not the beginning of budget formulation, as in the United States, but rather the final result of budget deliberations following the completion of negotiations among the majority political parties and the ministries.

Germany

In Germany, budget bill presentation is on the Budget Day that coincides with UK queen’s speech. As such, the three day 'Haushaltsdebatte' is the annual big set-piece of German politics.

Many of the government's initiatives are well known in advance, having been carefully agreed upon during long negotiations between the governing coalition parties. The three day debate is mainly a chance for the government to highlight the 'success' of its policies and outline its plans for the future. In their speeches, the chancellor, his finance minister and the rest of the cabinet will cover all policy areas, from spending issues to defence and foreign policy.

The opposition parties, meanwhile, will tries to expose the chinks in the government's armour. After the first reading of the budget bill in the Bundestag or Federal Parliament, it is closely scrutinised by the parliamentary budget committee, which is chaired by an opposition MP. The bill then goes to Germany's second chamber, the Bundesrat or Federal Council, where the country's regional states are represented.



United Kingdom

In the UK, the budget is prepared by the Chancellor of the Exchequer, the second most important member of the government. It must be passed by Parliament.
The Parliament seldom makes changes to the budget.

France

In France, the finance bill is presented to the National Assembly together with a report on the general economic situation. The budget proposals are referred to the Committee of Finance, General Economy and Planning. Any changes to the finance bill are presented as 'adjustments'.

The proposals are then passed on to the Senate for consideration within 20 days. It is here that the budget is likely to encounter the toughest, although mostly verbal resistance. The Senate may be controlled by opposition parties. The government may indulge them and give way on a few issues. However, if it commands a solid majority in the National Assembly it can be adamant on its original proposals.

The government now treads more carefully if it has a slender majority based on a fractious coalition. The governing parties find a compromise, preferably before the bill is presented to parliament. If the prime minister is in a tight spot and needs to rely on every single vote, maverick parliamentarians - or parties - can wreak havoc and force last-minute changes.

However, it can be said that the French government's budget has an easier time in parliament than either Germany or the United States.

China

The Legislature of China also known as National People’s Congress is a huge body which on the whole meets only for a few days every year. A few important members from this body are chosen to constitute a “standing committee.”

It is this committee which drafts the budget in China. However, the National People’s Congress meets to approve this draft and give it the final form of the “new annual Budget.”

No comments: