What is Budget?
The Union Budget of India is an annual financial statement, which analyses the government’s revenue and expenditure for a particular fiscal year between 1st April and 31st March. This statement shows the government’s receipts and payments under three accounts i.e. (i) Consolidated Fund, (ii) Contingency Fund, and (iii) Public Account.
For a common man, the budget generally means a change in taxation policies, and changes in prices of goods and services. The government revises income tax slabs through the Union Budget. The Union Budget also affects the rates of indirect taxes, which translates to a change in prices of goods and services.
The Union Budget is presented to the Parliament by the Finance Minister of India on the first day of February. The budget has to be passed by both the houses of the Parliament before it can be implemented. From 2017 onwards, the Railway Budget has also been integrated along with the Union Budget.
Revenue Budget and Capital Budget
The Union Budget is divided into two i.e. Revenue budget and Capital budget.
Revenue budget deals with the government’s revenue receipts and revenue expenditure. Revenue receipts are of two kinds – tax receipts and non-tax receipts. Tax revenue comes from direct and indirect taxes collected by the government, whereas non-tax revenue comes from other sources such as profits from a PSU. The expenditure that the government incurs in its day-to-day operations and other expenditures on public welfare schemes is called revenue expenditure. An excess of revenue expenditure over revenue receipts is termed as “revenue deficit”.
Capital budget deals with the capital revenue and expenditure of the government. Grants from other countries, loans from the RBI, loans from the public, loans from foreign governments, etc. are some of the capital revenues of the government. The money that is spent by the government on the development of infrastructure, machinery, etc. is called capital expenditure. In case the capital revenue of the government is less than the capital expenditure, there is fiscal deficit.
Presentation of the Budget
As stated previously, the Union Budget is presented by the Finance Minister of the country in the Parliament on 1st February. The budget goes through in the form of Finance Bill and Appropriation Bill.
The Finance Bill consists of addition of new taxes, modification of the existing tax structure, etc., while the Appropriation Bill authorizes the government to incur expenditure out of the Consolidated Fund of India.
Just before the presentation of the budget in the Union Parliament, the Finance Minister participates in the ‘Halwa Ceremony’, which signifies the printing of the budget documents.
Article 112 of the Indian Constitution defines Union Budget as an annual financial statement consisting of estimated revenues and expenditure for that year. The budget affects each and every citizen, as it encompasses a lot of provisions for people from all walks of life.
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Via:: Stock – India Infoline