What is the budget and why is it important for the country? What is Budget: India’s Finance Minister Nirmala Sitharaman will present the budget on February 1, 2023. The eyes of the whole country are fixed on the budget, because the government not only presents an account of the country’s economic condition, but also decides the economic future of the country. This year’s budget is coming at a time when the country is battling the third wave of Corona, so it is even more important for the common people. Let us understand what is the budget? Why is it important for the country? Here you will get complete information about the budget and some interesting facts related to the budget will also be told.
You must have heard about the budget but very few people know what is this budget, how it is made and why it is important for the country? If you also do not know about it, then from today’s article you will get full information about the budget.
The Finance Minister of our country is going to present a new budget on February 1, 2023, on this occasion, we thought that why not tell our audience in detail about it. What is a budget, why is it important, how is it made?
What is the Budget Full Definition of Budget
A budget is a financial plan for a defined period, often a year. It can also include planned sales volumes and revenues, resource amounts, costs and expenses, assets, liabilities and cash flows. Companies, governments, families and other organizations use it to express strategic plans of activities or events in measurable terms.
A budget is the summation of the finances allocated for a particular purpose and a summary of the intended expenditure along with proposals on how to accomplish them. This may include a budget surplus, providing funds for future use, or a deficit in which expenditure exceeds income.
Budget (derived from the French word bouget) refers to a list of money (revenue) of income and expenditure. Economics is an important concept in macroeconomics.
According to Article 112 of the Constitution of India, the Union Budget is the annual financial audit of the country. The Union Budget is an approximate statement of the government’s earnings and expenditure for a particular year. The government presents the details of its estimated income and expenditure for the particular financial year through the budget.
For example, the financial statement of the central government for a given year is called the Union Budget. The government has to present the budget at the beginning of every financial year. The financial year period in India is from 1st April to 31st March. The Union Budget of the country is presented for this period.
Actually, through the budget, the government tries to decide the extent to which it can spend in comparison to its earnings in the coming financial year.
The budget of the country is based on GDP
The current market value of the products or services produced in a country in a given year is called GDP. GDP means gross domestic product. On this the budget of the country rests. Actually, budgeting would not have been possible without GDP. Without knowing the GDP, the government cannot decide how much it has to maintain the fiscal deficit.
Also, without GDP, the government will not even be able to know how much the government will earn in the coming year. Without assessing the earnings, it will also be difficult for the government to decide how much it has to spend in which scheme.
The biggest changes in the budget so far
- Till 1955, the budget was printed only in English.
- In 1956, the budget began to be printed in Hindi.
- Till 2016 the Railway Budget was presented separately.
- In 2017, the Railway Budget was merged with the General Budget.
- Till 2016 it used to appear on the last day of February.
- In 2017, the date for presenting the budget was fixed as February 1.
- Before 1999, the general budget was presented at 5:00 pm.
- From 1999, it started presenting from 11:00 am.
It is also necessary to fix the fiscal deficit target for the budget.
Apart from GDP, it is also necessary to set a target of fiscal deficit for the budget for one year. Fiscal deficit is fixed in proportion to GDP. According to the fixed level of fiscal deficit, the government takes loan for that year. If the GDP is high, the government will be able to borrow more from the market for spending.
What are the main things included in the budget?
Simply put, the general budget of the government is the details of its earnings and expenditure. The major expenditure of the government is expenditure on welfare schemes of citizens, expenditure on imports, expenditure on defense and salary and interest paid on loans.
At the same time, the share of earnings to the government includes taxes, earnings of public companies and earnings from the issuance of bonds.
The Union Budget can be divided into two parts, the Revenue Budget and the Capital Budget:
This budget is an account of the income and expenditure of the government. It includes revenue receipt or income and revenue expenditure received by the government. There are two types of revenue receipt or income received by the government – income from tax and non-tax revenue.
Revenue expenditure is the expenditure on the day-to-day functioning of the government and the services rendered to the citizens. If the revenue expenditure of the government is more than its revenue receipt, then the government has a revenue deficit or a revenue deficit.
It includes capital receipts or capital receipts of the government and payments made on its behalf. Government capital receipts or receipts contain details of loans taken from the public (in the form of bonds), loans from foreign governments and the Reserve Bank of India.
Whereas capital expenditure or capital expenditure includes the expenditure of the government on machinery, equipment, house, health facilities, education. Fiscal deficit occurs when the total expenditure of the government exceeds its total income.
Which finance minister has presented the budget for the maximum number of times?
- Morarji Desai: 10 times
- P. Chidambaram: 9 times
- Pranab Mukherjee: 9 times
- Yashwant Rao Chauhan: 7 times
- CD Deshmukh: 7 times
- Yashwant Sinha: 7 times
- Manmohan Singh: 6 times
- TT Krishnamachari: 6 times
How many days before budget preparation starts?
Preparation for making the budget starts about 6 months in advance i.e. usually in September. In September, ministries, departments, states and union territories were issued circulars asking them to estimate their expenditure for the coming financial year and provide data on the funds required for it.
On the basis of these figures, funds are allocated to various ministries for public welfare schemes later in the budget. Every day the Finance Minister, Finance Secretary, Revenue Secretary and Expenditure Secretary meet every day after the budget preparation process starts.
From October-November, the Finance Ministry meets with the officials of other ministries and departments and decides how much fund should be given to which ministry or department. The budget making team has been continuously receiving inputs from the Prime Minister, the Finance Minister and the Deputy Chairman of the Planning Commission throughout this process. The budget team consists of experts in various fields.
Before preparing and presenting the budget, the Finance Minister also holds discussions with several industry organizations and industry experts. After finalizing all the things related to the budget, the blueprint is prepared. After everything is decided regarding the budget, the budget document is printed.
Paperless budget is being presented in the country since 2020. Finance Minister Nirmala Sitharaman has presented paperless budget in 2020 and 2023.
Briefcase to Paperless Budget:
Till 2018 the finance minister used to carry the budget document in the briefcase. In 2019, Nirmala Sitharaman brought the budget document in a file. The national emblem was made on this file, it was called Bahi-Khata.
In 2020, Nirmala Sitharaman read the budget speech from a tablet. After that, the way of presenting the budget changed till now, where heavy briefcases were used, the same paperless budget is presented today.
When does the budget session start in India and when is it implemented?
The budget session of our country begins with the President’s address. Actually, after the commencement of any session or the formation of a new government, the first session of Parliament begins with the President’s address. The Budget 2023 session also began with the speech of President Ram Nath Kovind.
The President’s approval is required before the budget is presented in the Parliament. After getting the assent of the President, it is placed before the cabinet and after that it is introduced in both the houses of the Parliament.
Budget comes into effect from April 1
After the budget is presented, it is necessary to get it passed by both the houses of the Parliament i.e. Lok Sabha and Rajya Sabha. After being passed by both the houses, the budget comes into force on the first day of the coming financial year i.e. 1st April. The period of the current financial year in the country is from April 1 to March 31.
Budget printing in North Block begins every year with the Halwa ceremony. Halwa is made in a large pan in the Ministry of Finance. The Finance Minister and all the officers of the Ministry of Finance participate in this program. Halwa is distributed among the people present there. However, this time the Halwa ceremony could not take place due to the Corona epidemic. Sweets were fed to the people involved in the budget team.
Which woman finance minister presented the budget for the first time?
In 1970, Indira Gandhi presented the budget as the first woman finance minister. During that time, apart from the PM, he also had the charge of the Finance Ministry.
Which is the longest and shortest budget speech?
Nirmala Sitharaman’s budget speech in 2020 was 2 hours 40 minutes, which is the longest budget speech ever. Whereas in 1977, HM Patel presented an interim budget of eight hundred words, this is the shortest budget speech ever.
Is there complete secrecy regarding the budget?
The budget document is prepared by the selected officials of the Ministry of Finance. In order not to leak the budget document, all computers used in it are isolated from other networks. The officers and employees working on the budget have to stay in North Block offices for two to three weeks. During this time they are not allowed to go out.
Why is the Economic Survey conducted a day before the budget?
The Economic Survey is presented in the house a day before the general budget of the country. The Economic Survey for Budget 2023 was presented on 31 January 2023.
The Economic Survey has projected GDP for the next financial year. Economic Survey is an annual report card of the country’s economy that examines the performance of each sector and then suggests future course of action.
The first Economic Survey of India was presented in 1950-51. Till 1964 it was presented along with the general budget, but from 1965 it was separated from the budget.
Some interesting facts and important information related to the budget
The first budget of independent India was presented by RK Shanmukham Chetty on 26 November 1947. After Shanmukham, Finance Minister John Mathai presented the first United India Budget.
In this only the economy was reviewed and no tax was imposed. In this, the financial details of various states coming under the princely states were also presented. Since 1947, 10 general budgets have been presented in the country.
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✅What is a budget, how is it prepared?
The Finance Ministry prepares the budget with the help and cooperation of other ministries and departments. During this, the Ministry of Finance issues guidelines on the basis of expenditure. On this, all the ministries have to state their demand. At the same time, the budget division of the Department of Economic Affairs in the Ministry of Finance is responsible for preparing the budget.
✅Who is involved in the preparation of the budget?
Who prepares the budget? The Union Budget of India is prepared after mutual consultations of several departments. It includes the Finance Ministry, NITI Aayog and many other ministries of the government. The Finance Ministry issues guidelines on the basis of expenditure, on which different ministries state the demand for funds on their behalf.
✅What are the types of budgets?
Types Of Budget
1. General budget
2. Execution budget
3. Jirobase Budget
4. Outcome Budget
5. Gender Budget
✅What is the budget of 2023?
If we talk about the budget, then in 2023-23, the government will spend Rs 39.44 lakh crore.