Beginners Guide To Union Budget: A Financial Document For The Year Ahead

The Union Budget is an essential part of India's economic planning, affecting everything from government spending to public services. This crucial financial document outlines the state's projected income and expenditure for the upcoming fiscal year. Finance Minister Nirmala Sitharaman will present the Union Budget on February 1, 2025.

Here's a beginner's guide to understanding the Union Budget:

1. The Union Budget is a detailed financial plan for the government's expected income (revenue) and expenditure for the financial year starting April 1 and concluding on March 31.
2. While Article 112 of the Constitution states that the President should present the Budget, it is actually the Union Finance Minister who does so in Parliament.
3. The Union Budget is presented annually on February 1. But in election years, the government follows a two-part approach — an interim Budget ahead of the elections, and the full Budget, which after the election results.
4. Until 1998, the Budget was presented at 5 pm on the last working day in February. In 1999, Yashwant Sinha, under the Atal Bihari Vajpayee-led government, decided to change the presentation time to 11 am. The government felt it was a more practical time for discussion and implementation.
5. The 2017-18 Budget marked a significant change by shifting the presentation date to February 1. It also ended the decades-long tradition of presenting a separate Railway Budget.
6. The Union Budget allocates funds to various government ministries and departments, managing sectors like defence, education, healthcare, infrastructure, and subsidies. The allocation determines the scope of government projects and initiatives in these areas.
7. The Budget is divided into two parts – the revenue budget and the capital budget. The revenue budget deals with the government's daily operational expenses, such as salaries, pensions, and routine services. If spending exceeds income, a revenue deficit occurs.
8. The capital budget focuses on long-term investments such as infrastructure development, educational projects and healthcare initiatives. A fiscal deficit arises when capital expenditure exceeds the revenue budget, signalling the government's borrowing needs for the year.
9. The preparation of the Budget involves extensive consultations and meetings with various government departments, experts, and other stakeholders. These discussions ensure the budget is tailored to the needs of the nation and reflects the government's economic goals.
10. The Budget plays a significant role in shaping India's economic policies, influencing everything from the tax regime to public welfare schemes. It is a document that affects not only the functioning of the government but also the lives of ordinary citizens.