What is Union Budget? Know about its significance
Union Budget is presented every year by the country’s finance minister, in accordance with Article 112 of the Constitution. This year, finance minister Nirmala Sitharaman will present the Union Budget on February 1.
The finance minister is expected to begin her Budget speech from 11 am.
The Budget Session of the Parliament will be divided into two phases –from January 31 to February 11 and then from March 2 to April 3.
Till 2016, finance ministers would deliver the Budget speech on the last working day of February. However, departing from the convention, the Narendra Modi government in 2016 decided to present the Union Budget on February 1 so that various government departments get more time to decide on the expenditure part.
What is Union Budget?
Union Budget is the annual financial statement that consists of a detailed account of the government’s revenue and expenditure for that particular financial year, from April 1 to March 31.
Union Budget is divided into two parts – Revenue Budget and Capital Budget.
Revenue Budget deals with the government’s revenue receipts and expenditure. Revenue receipt comprises two parts – tax revenue and non-tax revenue.
Tax revenue comes from levying of taxes on individual or an entity and transaction of goods and services (indirect tax).
On the other hand, non-tax revenue comes by charging the services provided by the government.
Revenue expenditure is the amount spent on day to day functioning of the government and on various services offered to citizens.
Capital Budget tells about capital receipts and payments of the government. Capital receipts takes into account loans from public, foreign governments and the Reserve Bank of India (RBI).
Capital expenditure means expenses incurred on development of machinery, equipment, building, health facilities, education etc.
Union Budget holds importance because it ensures efficient allocation of resources, changes tax slabs (not always), keeps a check on prices of essential commodities, helps reduce employment and poverty levels.