As all of you are aware that Budget Session of Parliament started from today and many important topics/bills are expected to be presented on the floor of parliament. Friends, the Budget is presented every year and we keep reading important points. But this time we are here with a whole new series where the Budget will be discussed in a layman form. From parliamentary terms to their definition and meaning, you will find all the important details in this series. And not only that, this will also have the comparison with last year’s budget.
So now lets discuss some key feature regarding Budget :
The word Budget is derived from old French word “bougette” is a quantified financial plan for a forthcoming accounting period.
The Article 112 of the constitution of India states the Union Budget of India as the Annual financial statement which is a statement of the estimated receipts and expenditure of the government for that particular year. It is presented each year on the last working day of February by the Finance Minister of India in Parliament. It keeps the account of the government’s finances for the fiscal year that runs from 1st April to 31st March.
The Union budget is preceded by an Economic Survey which outlines the broad direction of the budget and the economic performance of the country. The Budget is the most extensive account of the Government`s finances, in which revenues from all sources and expenses of all activities undertaken are aggregated.
Budget can be divided in to two parts namely (a) Capital and (b) Revenue. The first one broadly pertains to one time expenditure, whereas the latter one pertains to recurring expenditure.
(A)Capital Budget :- It consists of capital receipts and payments and also incorporates transactions in the Public Account. Capital receipts – Receipts by way of (a) loans raised from the market, (b) borrowing from RBI, (c) external assistance from foreign Govt., (d) recoveries of loans and advances. Capital expenditure – It is the expenditure incurred on (i) acquisition of assets and investments, (ii) loans and advances to State Governments.
(B) Revenue Budget : The revenue budget consists of revenue receipts of the government (revenues from tax and other sources) and the expenditure met from these revenues.
Revenue receipts – Receipts by way of (a) direct and indirect taxes, (b) interest, (c) dividends and (d) profits from investments, (e) fees and other receipts from services rendered by the Govt. Revenue expenditure –These are expenses incurred for the (i) normal running of the Govt. departments, (ii) interest charges on debt and subsidies.
The Union Budget of India has the following components:
a. Annual Financial statement – which sets the estimated revenue and capital account of the Govt. for the financial year.
b. Demands for grants – which details the requests for funds made by different govt. departments and ministries.
c. Finance Bill – containing the proposals for levy of new taxes and modification of the existing tax structure.
The other documents which are annexed to the budget are:
a. Budget at a glance – which presents a snap shot of the state of Govt. finances detailing plan and non-plan outlays, revenue, fiscal and primary deficit.
b. Receipts budget – which details tax, non-tax revenues and capital receipts
c. Expenditure budget – details tax, non – tax revenues and capital receipts
d. Explanatory memorandum – Which provides detailed item wise breakup of the receipts and expenditure.
Who presented the Budget?
- The budget was introduced for the first time in India on April 7, 1860 by the East India Company to the British Crown.
- The first Union budget of independent India was presented by R. K. Shanmukham Chetty on November 26, 1947.
- Morarji Desai, the former finance minister of India, present the budget a record 10 times. This is the most by any finance minister in the history of India.
- In 2001, NDA finance minister Yashwant Sinha changed the time of budget presentation from 5 pm to 11 am. Since then this tradition has been continued further.
- The Lok Sabha has one month to discuss and vote on the budget before it comes into effect from April 1 every year.
- Indra Gandhi has been India’s only woman finance minister. Till date, no other Indian woman has had this unique distinction.
- Jawaharlal Nehru was the first Indian Prime Minister to present the Union Budget, he did so in the financial year 1958-59.
- Rajiv Gandhi, Indira Gandhi and Jawaharlal Nehru are the only three Prime Ministers belonging to the same family to have presented the Budget.