Halwa Ceremony Marks Union Budget Preparation 2025

The Halwa ceremony is ritual in India’s budget preparation process. It occurs annually five days before the presentation of the Union Budget. This year, the ceremony will take place on February 1, 2025. Union Finance Minister Nirmala Sitharaman will lead this traditional event at North Block.

What Is the Halwa Ceremony?

The Halwa ceremony is a time-honoured practice in the Government of India. It involves cooking and serving halwa to officials and staff engaged in preparing the Union Budget. The ritual signifies the commencement of the final stage of budget preparations. Nirmala Sitharaman has participated in this ceremony, often seen stirring the halwa.

Significance of the Halwa Ceremony

This ceremony marks the beginning of a ‘lock-in’ period for budget officials. After the ceremony, these officials are confined to the North Block. They are cut off from external communication and are not allowed to use mobile phones. This measure helps prevent any leaks regarding budget details before the official announcement in Parliament.

Budget Presentation Timeline

The Union Budget for 2025-26 will be presented on February 1. The budget session of Parliament begins on January 31. President Droupadi Murmu will address a joint sitting of both Houses on this date. Following the address, Parliament will have a break from February 14 and will resume on March 10.

Historical Context

Nirmala Sitharaman will present her seventh budget this year. This surpasses the record of former Prime Minister Morarji Desai, who presented five annual budgets and one interim budget between 1959 and 1964. Sitharaman’s tenure reflects period in Indian economic history.

Current Economic Context

The upcoming budget is set against a backdrop of weak GDP growth. The Indian economy grew by 5.4 per cent in the July-September quarter of 2024-25, falling short of the Reserve Bank of India’s forecast of 7 per cent. The RBI has revised its growth forecast for the year down to 6.6 per cent. The Economic Survey has projected a conservative GDP growth of 6.5-7 per cent.

Budget’s Paperless Format

Continuing a trend from previous years, the Budget 2025 will be delivered in a paperless format. This move aligns with modernisation efforts within the government. It reflects a shift towards digital governance and sustainability.

Key Focus Areas

The budget will focus on economic recovery and growth. Analysts are keen to see the government’s plans to stimulate consumption and investment. The economic outlook remains a priority for the Modi government as it navigates challenges in the current fiscal environment.

Future Implications

The decisions made in this budget will have long-term implications for India’s economy. They will influence fiscal policy and economic growth strategies for the remainder of the Modi 3.0 tenure. Stakeholders are closely monitoring the announcements for their potential impact.

Questions for UPSC:

1. Critically analyse the significance of the Halwa ceremony in the context of India’s budget preparation process.
2. What is the role of the Reserve Bank of India in shaping economic forecasts? Explain its impact on fiscal policy.
3. What are the implications of presenting the Union Budget in a paperless format? Discuss its relevance in ‘s governance.
4. Explain the challenges faced by the Indian economy in 2024-25. What strategies can be employed to encourage economic growth?

Answer Hints:

1. Critically analyse the significance of the Halwa ceremony in the context of India’s budget preparation process.

1. Marks the final stage of budget preparation, symbolizing readiness for the budget presentation.
2. Ensures confidentiality as officials enter a ‘lock-in’ period, preventing leaks of budget details.
3. Strengthens team morale and camaraderie among officials involved in the budget process.
4. Tradition reflects the cultural practices embedded in governmental procedures.
5. Involves participation from the Finance Minister, denoting the importance of the budget in governance.

2. What is the role of the Reserve Bank of India in shaping economic forecasts? Explain its impact on fiscal policy.

1. Acts as the central bank, responsible for monetary policy and economic stability.
2. Provides growth forecasts that guide government fiscal planning and budget allocations.
3. Adjusts interest rates based on growth projections, influencing borrowing and spending.
4. Conducts surveys and assessments that inform both government and market expectations.
5. Utilizes tools like the Monetary Policy Committee to ensure economic targets are met.

3. What are the implications of presenting the Union Budget in a paperless format? Discuss its relevance in governance.

1. Promotes sustainability by reducing paper waste and aligning with environmental goals.
2. Enhances efficiency and accessibility of budget documents for stakeholders and the public.
3. Reflects modernization in governance, showcasing India’s shift towards digitalization.
4. Facilitates real-time updates and easier dissemination of budget information.
5. Encourages transparency and accountability in the budget process through digital records.

4. Explain the challenges faced by the Indian economy in 2024-25. What strategies can be employed to encourage economic growth?

1. Weak GDP growth, with projections falling short of expectations, indicating sluggish economic activity.
2. High inflation rates affecting consumption and purchasing power among citizens.
3. Global economic uncertainties impacting trade and investment flows into India.
4. Need for structural reforms to enhance productivity and efficiency in various sectors.
5. Strategies include increasing public investment, promoting exports, and implementing tax reforms to stimulate growth.