Union Budget

Definition: According to Article 112 of the Indian Constitution, the Union Budget of a year, also referred to as the annual financial statement, is a statement of the estimated receipts and expenditure of the government for that particular year, presented each year on the last working day of February by the Finance Minister of India in Parliament.

Description: Union Budget keeps the account of the government’s finances for the fiscal year that runs from 1st April to 31st March. Union Budget is classified into Revenue Budget and Capital Budget.

Revenue budget includes the government’s revenue receipts and expenditure. There are two kinds of revenue receipts – tax and non-tax revenue. Revenue expenditure is the expenditure incurred on day to day functioning of the government and on various services offered to citizens. If revenue expenditure exceeds revenue receipts, the government incurs a revenue deficit.

Capital Budget includes capital receipts and payments of the government. Loans from public, foreign governments and RBI form a major part of the government’s capital receipts. Capital expenditure is the expenditure on development of machinery, equipment, building, health facilities, education etc. Fiscal deficit is incurred when the government’s total expenditure exceeds its total revenue.

Union Budget for FY16 to be presented on Feb 28 by Finance Minister Shri Arun Jaitley. The Economic Survey will be tabled on 27 February and the Railway budget on 26 February.
Watch out for more Budget related terms next week.

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