INSUBCONTINENT EXCLUSIVE:
Union Budget is an annual financial statement of Government of India
It details its finances - where money comes from and where it goes - as well as estimates of amount of money required for various programmes
and services going forward
Each year, much awaited event is monitored closely for its possible impact on different sections of economy
From economists to analysts to tax experts to general public, all eyes remain on Budget announcements for any signs of changes in policy in
coming period. Budget documentsThis is a set of documents tabled in Parliament as part of Budget
They include Budget Speech, Annual Financial Statement, Demands for Grants (DG), Macro-Economic Framework and Fiscal Policy Strategy
Statements, Expenditure Budget, Receipts Budget and Expenditure Profile.Budget speechIt is speech delivered by finance minister in
Parliament to present Budget.Finance BillA government submits its proposals - in terms of imposition, abolition, remission, alteration or
regulation of taxes - to Parliament through this document. Financial statementThis document shows estimated receipts and expenditure of
Government of India for coming period in relation to year gone by
It also contains details on actual expenditure for year before past year
The financial statement has three parts: Consolidated Fund, Contingency Fund and Public Account.Capital budgetCapital budget consists of
capital receipts and payments, including investments in shares, loans and advances granted by Centre to states, government companies,
corporations and other parties
Capital receipts and capital payments together constitute capital budget. Capital receiptsCapital receipts comprise loans raised by
government from public - called market loans; borrowings from Reserve Bank of India (RBI) through sale of treasury bills; loans received
from foreign governments and bodies, and recoveries of loans granted by Centre to States, Union Territories and other parties. They also
include proceeds from disinvestment of government equity in public enterprises. Expenditure BudgetEstimates made with respect to amount of
money required for a scheme or programme are indicated in Expenditure Budget
These estimates are shown on a net basis in terms of revenue and capital in this section.Fiscal deficitIt is amount of money by which
government expenditure in a year exceeds government collections (receipts)
In other words, excess of total expenditure over total non-borrowed receipts is called fiscal deficit. To meet shortfall, government
borrows money from public.Fiscal policyFiscal policy is a change in government spending or taxing designed to influence economic activity
A government can moderate aggregate demand in economy by tweaking pattern and magnitude of budgetary surpluses and way they are
financed.Plan outlayIt is amount of money earmarked on projects, schemes and programmes announced in Plan
In other words, it indicates how much money is required to achieve certain goals mentioned in Plan. Balanced BudgetA Budget is said to be
balanced when receipts equal expenditure. Budget estimatesIt is projection of cost of a programme or goal prepared for budgeting and
planning purposes. Revenue budgetRevenue budget consists of revenue receipts and expenditure met from these revenues. Tax revenues
comprise proceeds of taxes and other duties levied by government. Revenue expenditureRevenue expenditure is expenditure which does not
result in creation of assets for government is treated as revenue expenditure.Revenue deficitA revenue deficit occurs when revenue
expenditure exceeds revenue receipts, and is determined as amount of money by which former exceeds latter.TAXES AND INTEREST RATESDirect
taxDirect taxes are taxes that are paid directly by individuals (income tax) and corporations (corporate tax) to government.Indirect
taxIndirect taxes, such as Goods and Services Tax, are paid to government indirectly by end-consumer.InflationThe rate of increase in price
In other words, it is pace at which prices of goods and services move higher. Monetary policy and repo rateIt comprises actions taken by
Reserve Bank of India (RBI) to regulate level of money or liquidity in economy, such as changes in key lending rates. It is key interest
rate at which central bank lends short-term funds to commercial banks against government securities.
