Union Budget 2022: The budget session of Parliament is scheduled to begin from January 31, with the annual budget being the highlight of the session. Every section of the economy has its own expectations from the Union Budget as everyone is eager to see whether the budget will see a rise or fall in prices in their areas of interest. Let us take a look at what exactly is the Union Budget and its components in the meantime.
What is Union Budget?
The pre-estimate of the amount to be received as revenue and the amount to be spent as expenditure in a specified period in future is known as budget. Article 112 of the Constitution of India defines the Union Budget or Annual Financial Statement as a statement of the estimated receipts and expenditure of the Government of India.
The Union Budget is presented by the Finance Minister of the country for the next financial or financial year which starts from 1st April every year.
revenue source for the government
The taxes we pay and the penalties we incur are all considered revenue for the government. Other sources through which the government receives revenue are as follows:
- Taxes – Corporation Tax, Income Tax, Goods and Services Tax
- Non-tax revenue – money earned through public enterprises in the form of profits, dividends, fines and penalties.
- Custom
- union excise duty
- non-debt capital receipts
head of government expenditure
The government’s expenditure is included in the pension and subsidies given to the people and institutions in the country. The following are the areas where the government spends money.
- Centrally Sponsored Schemes
- Central Sector Schemes
- interest payment
- Defense
- subsidy
- Finance commission and other transfers
- States’ share in taxes and duties
- pension
- other expenses
Components of the Union Budget
The draft of the Union Budget mainly consists of two parts. Capital budget and revenue budget.
- Capital Budget: Capital budget refers to the allocation of funds in the country’s fixed assets which will last for more than a year. It further gets divided into capital revenue or receipts and capital expenditure.
Capital revenue or receipts are such revenues which increase the liability to the government such as
- loan from reserve bank of india
- public debt
Whereas capital expenditure on the other hand includes payments that create long-term assets and infrastructure for the welfare of the public such as
- health facilities
- educational infrastructure
- Construction of land, building etc.
- Revenue Budget: A revenue budget is a statement of all the revenue and expenditure that should be earned or spent by the government within the year for which the budget is proposed. A situation where revenue expenditure exceeds revenue income is known as revenue deficit.
pudding ceremony
A traditional tradition followed before the announcement of the Union Budget is the ‘Halwa Ceremony’ which is organized by the Finance Minister of the country. The ceremony begins with the printing of budget documents and the halwa is served as a good gesture to the officers and employees involved in the printing process. All the officers and employees stay in North Block for about 10 days till the budget is presented by the Finance Minister in the Parliament.
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