Correct Option
The correct option is Both 1 and 2
Explanation
The Union Budget encompasses the Annual Financial Statement presented before Parliament along with demands for grants. Both statements in this question reflect the procedural and constitutional framework governing the Union Budget as recognised in official practice and constitutional provisions.
Statement-wise Analysis
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Statement 1 - Correct (as per official key): The Union Finance Minister presents the Annual Financial Statement before both Houses of Parliament. In constitutional convention and executive practice, this is done as a representative of the Union Cabinet, headed by the Prime Minister. The collective responsibility of the Cabinet means the Finance Minister acts on behalf of the Council of Ministers led by the Prime Minister. However, it must be noted that Article 112 strictly states the President causes the statement to be laid before Parliament - making this statement constitutionally imprecise. The official UPSC key treats this as correct.
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Statement 2 - Correct: Article 113(3) of the Constitution explicitly mandates that no demand for a grant shall be made except on the recommendation of the President of India. This is an absolute constitutional requirement - no financial demand can be placed before the Lok Sabha without prior presidential recommendation, ensuring that expenditure proposals from the Consolidated Fund of India carry executive sanction at the highest constitutional level.
Key Takeaway: At the Union level, demands for grants require the President's recommendation under Article 113(3). The Annual Financial Statement is presented by the Finance Minister before both Houses of Parliament as part of the Union Budget process - the official UPSC key treats both statements as correct.