The Union Budget of India is a comprehensive financial statement presented annually by the Government of India. It outlines the government’s estimated revenues and expenditures for the upcoming fiscal year, serving as a blueprint for economic planning and policy implementation.
Significance of the Union Budget
The Union Budget holds paramount importance as it:
- Economic Planning: Sets the direction for the country’s economic policies and priorities.
- Resource Allocation: Determines the distribution of resources across various sectors, including health, education, defense, and infrastructure.
- Fiscal Discipline: Aims to manage the fiscal deficit and ensure macroeconomic stability.
- Public Welfare: Introduces schemes and initiatives aimed at improving the socio-economic conditions of citizens.
Components of the Union Budget
The Union Budget comprises two primary parts:
- Revenue Budget:
- Revenue Receipts: Includes tax revenues (income tax, corporate tax, GST) and non-tax revenues (dividends from public sector enterprises, interest receipts).
- Revenue Expenditure: Covers expenses for the normal functioning of the government, such as salaries, subsidies, and interest payments.
- Capital Budget:
- Capital Receipts: Consists of loans raised by the government, disinvestment proceeds, and recoveries of loans.
- Capital Expenditure: Investments in infrastructure projects, acquisition of assets, and loans granted by the government.
Preparation of the Union Budget
The budget preparation is a meticulous process involving:
- Ministry of Finance: The primary body responsible for formulating the budget.
- Consultations: Engagements with various stakeholders, including ministries, state governments, industry leaders, and economists, to gather inputs and assess needs.
- Economic Surveys: Analysis of the country’s economic performance to inform budgetary decisions.
- Confidentiality: Maintaining strict secrecy to prevent leaks and market speculation.
The process typically begins six months prior to the presentation, around August or September.
Announcement of the Union Budget
Traditionally, the Union Budget is presented on February 1st each year. For instance, Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget for the fiscal year 2025-26 on February 1, 2025.
Historical Budget Data
Over the years, India’s budget has evolved to address changing economic landscapes. For detailed historical data, the Ministry of Finance provides archives dating back to 1947.
