Budget

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Budget estimates

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	Every year, the Budget is presented before Parliament by the Union finance minister. During the speech, the funds allocated for various jobs and activities and ministries are laid out. These numbers are called Budget estimates. For example, if the government sets Rs 1,000 crore aside for defence, then Rs 1,000 crore will the Budget estimate for defence for the given financial year.</div>
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	One thing to note here is that these estimates are not exact numbers or the final commitment by the government to any particular sector. These are just estimates of the extent of expenditure the government is willing to go for. The government later gives a revised estimate of how much is possible for it to extend to the said sector. The revised estimates and budget estimates may vary, but the difference may not be huge. The actuals are the numbers that represent the real amount extended by the government to the sector concerned.</div>
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	Budget estimates represent the government&#39;s wishes and ambitions. Revised estimates show how the expenditure is likely to pan out. Actuals give the real number for how much was really extended.</div>

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What are Budget estimates, Budget estimates Definition, Budget estimates News

What are Budget estimates

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	The revenue budget consists of revenue receipts of the Government of India and the expenditure met using that revenue. The revenue budget details the sources from where the revenue is coming to the government. The government&#39;s sources for revenue are tax collected from people and corporations. The government also makes investments through various instruments and receives interest and dividends on those. Its non-tax revenue includes the disinvestments that the government does in the companies where it holds stakes. This also accounts for the revenue for the government.&nbsp;</div>
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	According to the Budget Estimates of 2019-20, the revenue receipts of the government are likely to come around Rs 19,62,761 crore. Of this, Rs 16,49,582 crore is expected to come in the form of tax revenue and the remainder as non-tax revenue. According to the BE of 2019-20, the corporation tax should generate a revenue of Rs 7,66,000 crore for the government. Income tax, on the other hand, may come close to Rs 5,69,000 crore. The government can have Rs 1,55,904 crore via customs duty in its coffers. The revenue through GST collection for Budget estimate 2019-2020 may come around Rs 6,63,343 crore.&nbsp;</div>
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	In the non-tax segment, the total for interest receipts, dividends and profits is expected at Rs 1,77,239 crore. Fiscal services, general services, social and community services, and economic services may amount to Rs 1,32,783 crore.<br />
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		<strong>Source of Tax Revenue</strong></div>
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		The government generates its revenue from taxes and several other non-tax revenue sources. Tax is one of the major sources of revenue for the government to carry out its work. Tax revenue can be classified into a few major categories &mdash; corporation tax, tax on income, Customs, Union excise duties, service tax, and several others.</div>
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		Corporation tax is the biggest source of revenue for the government. Public and private companies registered under the Companies Act, 1956, are liable to pay corporation tax. Corporation tax is levied on the net income of the company. The collection, surcharge, cess and other receipts make up the huge chunk of the revenue.</div>
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		Tax on income is the other source of income for the government. Tax is levied on salaried persons and they are categorised in several tax brackets with different tax rates. The tax on income includes collections, surcharges, Securities Transaction Tax (STT), and other such kinds of charges.</div>
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		Wealth tax includes tax on real estate, tax on other kinds of wealth, and gift tax. The revenue generated by custom duties include import duties, basic duties, and duties levied on specific items. Cess on export and export duties also contribute to the same. The union excise duties levied on several items also contribute to the tax revenue.</div>
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The revenue budget consists of revenue receipts of the government and its expenditure. Learn more about revenue budget, revenue receipt, revenue expenditure and more revenue budget-related news here at Business Standard.

What is Revenue Budget | Revenue Receipt | Sources of Tax Revenue

Revenue Budget

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	Capital Budget consists of capital receipts (like disinvestment, borrowing, loans from public or foreign governments, Reserve Bank of India, etc) and capital expenditure (like expenditure on development of machinery, health facilities, etc).</div>
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	Capital budgeting comprises two words &mdash; &#39;capital&#39; and &#39;budget&#39;. It implies setting targets for projects/schemes to ensure maximum profitability.</div>
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	<strong>Parts of Capital Budget:</strong> Capital budget is divided into two parts &mdash; capital receipts and capital expenditure.</div>
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	<strong>Capital receipts in Union Budget</strong></div>
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	Capital receipts refer to incoming cash flows. They can be both non-debt and debt receipts. Loan from the general public, foreign governments and RBI form a major part of capital receipts.</div>
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	<strong>Example of capital receipts:</strong> Recovery of loans and advances given to state governments and foreign governments, disinvestment proceeds, money accrued to the government from issue of bonus shares, etc, are all examples of non-debt capital receipts.</div>
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	Debt receipts are those which the government needs to repay along with interest. Most of the government&#39;s capital receipts are debt receipts. They are shown as liabilities in the government&rsquo;s balance sheet.</div>
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	<strong>Capital expenditure in Union Budget</strong></div>
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	Capital expenditure is the expenditure on the development of machinery, equipment, building, health facilities, acquisition of assets like land, research &amp; development, education, etc.</div>
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	<strong>Examples of capital expenditure: </strong>Loans given by the government to states and public-sector undertakings (PSUs), loans that were taken in the past but are now returned, spending on infrastructure, machinery, land, road, etc.</div>
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What is Capital Budget, Capital Budget Meaning, Budget News, Capital Budget Types

Capital Budget

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	The Budget cycle comprises steps beginning in the run-up to the Budget and culminates into its presentation.</div>
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	The preparation of the Budget involves the Ministry of Finance, along with multiple bureaucrats. Before the Budget is prepared, expert advice is also taken from economists and other stakeholders.</div>
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	The cycle includes the following steps &mdash; estimating the amount of expenditure and receipts, estimating the fiscal deficit, trying to narrow the fiscal deficit, the presentation of the Budget, and getting the approval from Parliament.</div>
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	First, plans of expenditure of various ministries are looked at. According to the resources available, the amount is allocated for ongoing plans and new plans which can be taken up.</div>
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	Some non-plan expenditure, such as subsidies and wage payments, is also taken into account.</div>
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	Next, revenue payments in the form of capital and current receipts are estimated. Money from disinvestment or repayment of government loans falls into the category of capital receipts. Income from taxes, dividends from state-run companies, etc, fall under the category of revenue receipts.</div>
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	After these amounts are estimated, expenditure and receipt under each head are matched to see the shortfall, also known as deficit. This is deliberated upon and the government then decides how much it shall borrow to be able to meet the same.</div>
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	The government decides on the amount of borrowing after considering what amount of deficit it would like to maintain.</div>
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	Then, the government presents the Budget, which comes into effect on April 1, the beginning of a new financial year, after being approved by the Lok Sabha and signed by the President. The Rajya Sabha can give comments on the same.</div>

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Page 13 - Latest Updates on Budget estimates

States spend lower than their budgeted estimates: PRS Legislative Research