Union Budget of India is the country’s comprehensive Annual Financial Statement. The Union Budget consists of a detailed account of the government’s finances, its revenues from various sources and expenditures to be incurred on different activities that it will incur. As mentioned in the Article 112 of the Indian Constitution, the Union Government lays a statement of its estimated receipts and expenditure for that year, From April 1 to March 31, before both the Houses of Parliament.
What do you mean by Union Budget? What is the annual Budget of India?
The Finance Minister’s Budget presentation speech in the Lok Sabha comprises the following parts:
- Annual Financial Statement (AFS)
- Demand for Grants (DG)
- Appropriation Bill
- Finance Bill
- Macro-economic framework for the relevant financial year
- Medium Term Fiscal Policy cum Fiscal Policy Strategy Statement
- Expenditure Profile
- Expenditure Budget
- Receipts Budget
The Union Budget comprises Capital Budget, Revenue Budget, Expenditure Budget, and this also has the next fiscal year’s estimates.
Capital Budget:
The Capital Budget part of the Union Budget has accounts for capital payment and receipts which are government-related. Capital receipts include the following:
- Loans from the public
- Loans from the Reserve Bank of India (RBI)
On the other hand, capital payments include expenses incurred towards building long term assets and facilities, such as:
- Health facilities
- Development and maintenance of equipment
- Educational facilities
Revenue Budget:
The Revenue Budget records all the revenue receipts and expenditure, such as that earned or spent on running the operations for that particular year. If the revenue expense is more than that of receipts, it indicates that there is a revenue deficit.
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General objective and importance of the Union Budget
As mentioned earlier, the Union Budget’s general objective is to present the yearly financial record and plannings of the government and it helps the government in bringing out fast and all-inclusive economic growth of our country. It also empowers the government to carry out its constitutional duties such as providing social justice and equality for all. It has the following key objectives which highlight its importance of Union Budget in India:
- Resource allocation in the best interest of the society and the country and allocating resources optimally for public welfare.
- Uplift downtrodden sections of the society by reducing poverty levels and creating employment.
- Creating programmes for citizens so that they get basic needs such as food, shelter, education and health care.
- Union Budget makes sure that there is fair distribution of income through taxes and subsidies.
- Union Budget takes steps to control inflation, deflation and economic fluctuations thus ensuring economic stability in the country.
- The Union Budget can bring about changes in the tax structure in the country.
- The Union Budget of any country is crucial as it has widespread implications on that country’s economic stability and general life as such.
