Union Budget is an annual financial statement of Government of India.
It details its finances - where money comes from and where it goes - as well as estimates of amount of money required for various programmes and services going forward.
Each year, much awaited event is monitored closely for its possible impact on different sections of economy.
From economists to analysts to tax experts to general public, all eyes remain on Budget announcements for any signs of changes in policy in coming period.Budget documentsThis is a set of documents tabled in Parliament as part of Budget.
They include Budget Speech, Annual Financial Statement, Demands for Grants (DG), Macro-Economic Framework and Fiscal Policy Strategy Statements, Expenditure Budget, Receipts Budget and Expenditure Profile.Budget speechIt is speech delivered by finance minister in Parliament to presentBudget.Finance BillA government submits its proposals - in terms of imposition, abolition, remission, alteration or regulation of taxes - to Parliament through this document.Financial statementThis document shows estimatedreceipts and expenditure of Government of India for coming period in relation to year gone by.
It also contains details on actual expenditure for year before past year.
The financial statement has three parts: Consolidated Fund, Contingency Fund and Public Account.Capital budgetCapital budget consists of capital receipts and payments, includinginvestments in shares, loans and advances granted by Centre to states, government companies, corporations and other parties.
Capital receipts and capital payments together constitute capitalbudget.Capital receiptsCapital receiptscomprise loans raised by government from public - called market loans; borrowings from Reserve Bank of India (RBI) through sale of treasury bills; loans received from foreign governments and bodies, andrecoveries of loans granted by Centre to States, Union Territories and other parties.They also include proceeds from disinvestment of government equity in public enterprises.Expenditure BudgetEstimates made with respect to amount of money required for a scheme or programme are indicated inExpenditure Budget.
These estimates are shown on a net basis in terms of revenue and capital in this section.Fiscal deficitIt is amount of money by which government expenditure in a year exceeds government collections (receipts).
In other words, excess of total expenditure over total non-borrowed receipts is called fiscal deficit.To meet shortfall, government borrows money from public.Fiscal policyFiscal policy is a change in government spending or taxing designed to influence economic activity.
A government can moderate aggregate demand in economyby tweaking pattern and magnitudeof budgetary surpluses and way they are financed.Plan outlayIt is amount of money earmarked on projects, schemes and programmes announced in Plan.
In other words, it indicates how much money is required to achieve certain goals mentioned in Plan.Balanced BudgetA Budget is said to be balanced when receipts equal expenditure.Budget estimatesIt is projection of cost of a programme or goalprepared for budgeting and planning purposes.Revenue budgetRevenue budget consists of revenue receipts and expenditure met from these revenues.Tax revenues comprise proceeds of taxes and other duties levied by government.Revenue expenditureRevenue expenditure is expenditure which does not result in creation of assets for government is treated as revenue expenditure.Revenue deficitA revenue deficit occurs when revenue expenditure exceeds revenue receipts, and is determined as amount of money by which former exceeds latter.TAXES AND INTEREST RATESDirect taxDirect taxes are taxes that are paid directly by individuals (income tax) and corporations (corporate tax) to government.Indirect taxIndirect taxes, such as Goods and Services Tax, are paid to government indirectly by end-consumer.InflationThe rate of increase in price.
In other words, it is pace at which prices of goods and services move higher.Monetary policy and repo rateIt comprises actions taken by Reserve Bank of India (RBI) to regulate level of money or liquidity in economy, such as changes in key lending rates.It is key interest rate at which central bank lends short-term funds to commercial banks against government securities.