What is the Union Budget? When will Budget 2019 be presented? How is it prepared? Read to know all about the Union Budget of India.
While the formal printing of documents began on June 22 with the symbolic "halwa-making ceremony", the Union Budget 2019 will be presented on July 5. Finance Minister Nirmala Sitharaman has been seeking suggestions from industrialists and common man for the upcoming Budget. According to officials, the focus is clearly on reviving the economy and creating jobs.
Here's what you must know about Union Budget 2019
What is the Union Budget?
Union Budget of India is the country’s comprehensive Annual Financial Statement. It consists of details of the government's capital, revenue and expenditures. Article 112 of the constitution says, "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.
The Budget, in a nutshell, is nothing but a statement of income and expenditure. Two important elements on both sides - income and expenditure - are Revenue Receipts and Revenue Expenditure.
What date is the Budget 2019?
The Union Budget 2019 will be presented on July 5. In 2016, the government advanced the budget presentation to the first day of February, departing from the practice of presenting it on the last working day of the month, to give more time to departments to spend the money allocated to them. Sticking to the practice, this year the
Interim Budget was presented on February 1. The full-fledged Budget will, however, be announced in July 5.
Why Sitharaman's Budget 2019 is special?
Budget 2019 will be presented before the Parliament by Finance Minister Nirmala Sitharaman. The Interim Budget was tabled by Piyush Goyal on February 1. Breaching a largely male bastion, Sitharaman is the first woman in 48 years since then prime minister Indira Gandhi to hold charge of the key ministry.
Is railway Budget merged with general Budget?
Yes. Till 2016, the Union Railway Budget was presented separately a day before the Union Budget by the Railway Minister in the Parliament. Now, the Railway Budget will be announced by the Finance Minister along with the General Budget.
What was the Interim Budget 2019?
Former Union Finance Minister Piyush Goyal presented an Interim Budget for 2019 in Parliament on February 1. An Interim Budget usually doesn't list out new schemes or doesn't unveil any policy measures. Now that the Lok Sabha elections are through, the first full budget of Modi government 2.0 will be presented on July 5.
How is the Union Budget of India made?
The Union Budget is made through a consultative process involving ministry of finance, NITI Aayog and spending ministries. Finance ministry issues guidelines on the basis of which the ministries present their demands. The Budget Division of the Department of Economic Affairs in the finance ministry is the nodal body responsible for producing the Budget.
How is the Budget prepared?
Preparing a Budget is extremely tedious and a lengthy process. It begins with the Budget Division issuing circular to all ministries, states, UTs, autonomous bodies, deparments and the defence forces, who are asked to submit expenditure estimates for the upcoming year. Extensive consultations are held between Union ministries and the Department of Expenditure of the finance ministry once the estimates have been submitted.
In the meantime, the Department of Economic Affairs (DEA) and Department of Revenue meet stakeholders such as farmers, businessmen, FIIs, economists and civil society groups to take their views. Once the pre-Budget meetings are over, a final call on the tax proposals is taken by the finance minister. The proposals are discussed with the Prime Minister before the Budget is finally prepared.
What does the Budget presentation speech comprise?
The Budget presentation speech comprises the following parts:
Annual Financial Statement (AFS)
Demand for Grants (DG)
Macro-economic framework for the relevant financial year
Medium-Term fiscal policy and a strategy statement
What are the three categories of Budget?
The Union Budget comprises Capital Budget, Revenue Budget, Expenditure Budget
The Capital Budget part of the Union Budget has accounts for capital payment and receipts of the government. Capital receipts include: i) Loans from the public; ii) Loans from RBI
Capital receipts are loans raised by the government from the public (which are called market loans), borrowings by the government from the Reserve Bank of India and
other parties through sale of treasury bills, loans received from foreign bodies and governments, and recoveries of loans granted by the Central government to state and Union Territory governments and other parties.
Capital payments include expenses incurred towards building long term assets and facilities like land, buildings, machinery, etc.
The Revenue Budget records all the revenue receipts and expenditure. If the revenue expense is more than that of receipts, it indicates that there is a revenue deficit. Revenue expenditure is for the normal running of government departments and various services, interest payments on debt, subsidies, etc. Revenue receipts are divided into tax and non-tax revenue. Tax revenues are made up of taxes such as income tax, corporate tax, excise, customs and other duties that the government levies.
In non-tax revenue, the government's sources are interest on loans and dividend on investments like PSUs, fees, and other receipts for services that it renders.
The expenditure budget refers to the estimated expenditure of the government during a given financial year. It shows the capital and revenue disbursements of various ministries/departments and presents it under 'Plan' and Non Plan'. Expenditure Budget provides analysis of various types of expenditure. Demand for grants of the Central government is also a part of the Expenditure Budget.