The Union Budget is a crucial document that gives an insight into the government's financial plans for the upcoming fiscal year. This year, the Union Budget, which will be the second full budget of Modi 3.0, is scheduled to be presented by Finance Minister Nirmala Sitharaman on February 1, 2025, at 11 am, although official confirmation is still pending. This will be Ms Sitharaman's eighth budget presentation, following six annual and two interim budgets. The Budget 2025 session will be broadcast live on various news channels and will also be streamed online through the official government platforms and news websites.
Now, as we eagerly wait to see if the government has been kind enough to lower your income tax, among other things, here are the key differences between the Union and State budgets. Notably, there is a three-tier system of government, namely Central (or Union) Government, State Government and local government (like Municipal Corporation, Municipal Committee and Zila Parishad). These governments prepare their own respective budgets (called Union Budget, State Budget and Municipal Budget) containing estimates of expected revenue and proposed expenditure.
What is a Union Budget?
The Union Budget is the annual financial statement, which provides an estimate of the government's receipts and expenditures for the upcoming year. It plays a pivotal role in shaping the nation's economic agenda, guiding fiscal policies, and determining the allocation of resources across various sectors.
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The Union Budget is prepared through an elaborate process involving various stakeholders and takes several months to complete. It involves discussions with various ministries to finalise financial estimates and requirements for the upcoming fiscal year. Top officials, the Finance Minister, and the Prime Minister then review and discuss these inputs before making final decisions.
What is a State Budget?
The State Budget, on the other hand, is the "Annual State Government Financial Statement," which includes the estimated receipts and expenditures of the State for every financial year. States opt for their own presentation formats as per practice and convenience. Also, sources of revenues may vary from state to state, and similar variations can be seen in expenditure profiles.
