The budget of India is prepared by the Budget Division of the Department of Economic Affairs under the Ministry of Finance in the Central Government. The financial requirements of all other ministries are also taken care of in its preparation.
Item wise details of receipts and expenditure of the government are given in the budget. In which the estimated and revised figures for the current financial year and the actual figures for the previous year, as well as the estimates for the coming financial year are expressed.
The first question is, what is a financial year? Actually, there is a base year for accounting of financial matters, it is called financial year.
The period “between” 1st April to 31st March in our country is considered as a financial year. The current budget is for the financial year 2022-23.
Annual Financial Statement: The word ‘Budget’ is not directly mentioned in the Constitution of India, but it is called ‘Annual Financial Statement’ in Article 112 of the Constitution. The financial statement contains a detailed statement of the government’s estimated receipts and expenses for that year.
Budget Accounts/Budget Estimates: The budget accounting is the estimate of the revenue and expenditure received by the government from all taxes during the financial year.
Revised accounting/Revised Estimates: The difference between the estimates made in the budget and their actual figures according to the current economic conditions is called Revised Accounting. It is mentioned in the upcoming budget.
Fiscal deficit: The difference between the total revenue received by the government and the total expenditure is called fiscal deficit.
Revenue Receipts: All types of income received by the government which do not have to be returned to the government are called revenue receipts. These include all types of taxes and fees, interest and dividends received on investments and money received in return for various services. However, it does not include loans taken by the government, as they have to be repaid.
Revenue Expenditure: Expenditure on various government departments and services, payment of interest on loans and expenditure on subsidies is called revenue expenditure.
Finance Bill: A bill introduced in the Parliament to introduce new taxes, make any changes in tax or continue the existing tax structure is called Finance Bill. It is mentioned under Article 110 of the Constitution.
Appropriation Bill: Parliament’s approval is required for the government to withdraw money from the Consolidated Fund. The bill which is introduced for this approval is called Appropriation Bill.
Consolidated Fund: All revenue receipts of the government, loans taken from the market and interest received on loans given by the government are deposited in the Consolidated Fund. The biggest fund of the Government of India has been mentioned in Article 266 of the Constitution. Not a single rupee can be withdrawn from this fund without the approval of Parliament.
Contingency Fund/Contingency Fund: This fund is created so that if there is a need for emergency expenditure, money can be withdrawn even without the approval of Parliament.
Capital Receipts: Loans taken by the government from the market, loans from RBI and proceeds from disinvestment are kept under capital receipts.
Capital expenditure: Expenditure on all assets acquired by the government is kept under capital expenditure.
Gross Domestic Product (GDP): The monetary value of all the goods and services produced within the country’s borders, usually in a financial year, is called GDP.
Gross National Product (GNP): When we add GDP and the total investment made by local citizens abroad and subtract the profit earned by foreign citizens in our country, then the amount so obtained is called Gross National Product. .
Foreign Direct Investment (FDI): When a foreign company invests in a company present in India through its branch, representative office or subsidiary, it is called foreign direct investment.
Disinvestment: Disinvestment is a process in which the government raises its funds by selling assets of public sector units (PSUs) under its control. Governments do this to reduce the gap between their expenditure and income.
Subsidy: When any kind of cash or tax exemption is given by the government to individuals or groups, then it is called subsidy. Most of its purpose is public welfare.
Public Account: Under Article 266(1) of the Constitution, it has been said that the formation of a public account has been made. It is a fund where the government acts as a banker. It is worth mentioning that the government has no right on this money, because it has to be returned to the depositors.
Cut motion: When the government introduces a bill in the House for approval of Demands for Grants before the Parliament, sometimes a cut motion is introduced by the opposition. Through this, there is a demand for reduction in various demands.
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