What is the annual Union Budget?
The country is keenly waiting for the Union Budget which will be tabled on February 1. But what are its major components? Why does the govt conduct this annual exercise? Find the answers here
Under Article 112 of the Indian Constitution, the central government is bound to lay down the country's ‘annual financial report’. Also called the Union Budget of India, this is the most extensive account of the Central government’s finances.
Tabled in Parliament every year, the Union Budget provides details of how much money the central government expects to raise in the coming financial year, along with how and in which sectors it intends to spend that money.
However, the Union Budget is more than just an accounting document. It also reveals the broad policy positions of the government and serves as a platform for financial reforms.
Till its 2017 iteration, the Union Budget was presented on 28th February. However, since 2017, the finance minister has been presenting it on the 1st of February.
The Budget gives the statement of receipts and expenditure for three consecutive years. These are the actuals for the preceding year, estimates for the present year, and estimates for the coming year.
The Budget also includes the Appropriation Bill and Finance Bill. Both the Houses of Parliament have to pass them before implementation on 1st April of the new financial year.
The Appropriation Bill is a money Bill that gives the government the power to withdraw funds from the Consolidated Fund of India in order to meet its expenses during the course of the financial year.
Meanwhile, the Finance Bill contains key changes pertaining to direct and indirect taxes.
The nodal agency responsible for producing the Union Budget is the Department of Economic Affairs, which comes under the Ministry of Finance. The Budget is prepared through a consultative process that involves the finance ministry, the various spending ministries, and NITI Aayog.
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