As the Finance Minister prepares to present the Union Budget of India for the fiscal year 2013-2014, here are some budget basics for your better understanding:
What is the Union Budget?
The Union Budget of India is an annual affair, displaying the Government of India’s finances. Considered the most important economic and financial event in India, it is presented on the last day of February by the Finance Minister of India, and is referred as the annual Financial Statement in article 112 of the Constitution of India.
It gives an aggregate account of revenues from all sources, expenses on various activities undertaken by the government and estimates for the next fiscal year.
Who prepares the annual Union Budget?
A separate division in the ministry of finance – Budget Division looks after the preparation of the Budget.
Budget process:
- The Budget Division receives funds’ proposals and requirements from all government ministries and departments
- A Draft Budget is prepared, based on all the inputs received
- The Finance Minister in consultation with the Prime Minister approve the Draft Budget
- The Final Budget is then presented in the Parliament
- Each ministry’s grant proposal and revision of taxes (direct & indirect) are discussed and voted upon in the Parliament; and Finance Minister responds to questions.
- Once the grants are approved, 2 bills are introduced in the Lok Sabha – APPROPRIATION BILL (final approval of funds to be given to each ministry) and FINANCE BILL (tax proposals), Union Budget is approved.
How to understand the Budget Document:
The Finance Minister gives the budget speech mainly in two parts – Part A & Part B:
Part B: Deals with Taxation proposals. This can have direct bearing over a citizen’s personal finances, which may pinch or widen as effect of the proposals. A general reader can grasp the provisions by going through the Memorandum of Explanations attached, which gives the broad background of the new changes.
What is the Union Budget?
The Union Budget of India is an annual affair, displaying the Government of India’s finances. Considered the most important economic and financial event in India, it is presented on the last day of February by the Finance Minister of India, and is referred as the annual Financial Statement in article 112 of the Constitution of India.
It gives an aggregate account of revenues from all sources, expenses on various activities undertaken by the government and estimates for the next fiscal year.
Who prepares the annual Union Budget?
A separate division in the ministry of finance – Budget Division looks after the preparation of the Budget.
Budget process:
- The Budget Division receives funds’ proposals and requirements from all government ministries and departments
- A Draft Budget is prepared, based on all the inputs received
- The Finance Minister in consultation with the Prime Minister approve the Draft Budget
- The Final Budget is then presented in the Parliament
- Each ministry’s grant proposal and revision of taxes (direct & indirect) are discussed and voted upon in the Parliament; and Finance Minister responds to questions.
- Once the grants are approved, 2 bills are introduced in the Lok Sabha – APPROPRIATION BILL (final approval of funds to be given to each ministry) and FINANCE BILL (tax proposals), Union Budget is approved.
How to understand the Budget Document:
The Finance Minister gives the budget speech mainly in two parts – Part A & Part B:
Part A: Gives a broad outlay of money for different sectors. Priorities of the government, Introduction of new Schemes & Focus Areas are also indicated in this part. Last year’s Budget Data is compared with actual figures (which is called revised estimates, usually based on transactions till 31st Dec). So Part A of the Budget Speech is more concerned with the Macro aspect of the Economy, the economists’ main interest.
Part B: Deals with Taxation proposals. This can have direct bearing over a citizen’s personal finances, which may pinch or widen as effect of the proposals. A general reader can grasp the provisions by going through the Memorandum of Explanations attached, which gives the broad background of the new changes.
What are your views & expectations from the Budget 2013-2014, let us know in comments below.
Source: http://www.moneycontrol.com
