How to read the union budget
The Treasury Secretary’s Budget Statement is one of many pieces of budget documents that are uploaded to indiabudget.gov.in within hours of the presentation. We explain what needs to be considered in the documents.
On February 1, Finance Minister Nirmala Sitharaman will rise to Lok Sabha to present the Union’s budget for 2021-22. All peoples have their own budgets, but perhaps nowhere else is there such a national holiday with well-established traditions and ideas as in India.
This is one of those days of the year when the general public hears terms such as budget deficit, divestiture, gender budget, capital gains tax, and recapitalization, among others, that most may not seem familiar with. Most of all, people are interested in how much they will be taxed and what goods will become cheaper or more expensive.
So, here’s a quick guide on how to read your budget. All documents listed below are uploaded to www.indiabudget.gov.in within hours of the Minister of Finance’s speech in parliament.
Although the speech itself is a small part of the budget documents, it is the most important. The performance can be divided into two parts. Part A presents the Treasury Secretary’s expectations and reform direction for the next fiscal year.
Announces various schemes and activities planned for farmers, rural sector, health care, education, small and large enterprises, services sector, women, start-ups, banks and financial services, capital markets, infrastructure and others. The finance minister also announced some of the budgeted targets, such as diversification, budget deficits, bond market borrowings and others.
Part B of the budget contains notices for direct and indirect taxes (except for GST, which is not covered by the budget, but is determined by the GST Council). This part declares any changes in the payment of income tax, income tax, capital gains tax, customs duties and excise duties.
Part B is followed by an appendix that provides a brief breakdown of tax notices and budget expenditures by different schemes, programs and ministries. And in the last two years, there is something very important in the app. How much of the budget is funded from extrabudgetary resources in addition to fiscal and non-fiscal revenues and the credit program.
Budget at a glance
This document can be used as a basis for the main budget objectives for the next fiscal year, such as tax revenues, tax-exempt income, capital expenditures and government administrative expenses. It also contains a target for the budget deficit (the difference between expenditures and revenues of the Center) and a target for the nominal growth of gross domestic product for the next year.
This document also contains detailed information such as the cost of subsidies for fuel, fertilizers and food, how much of the Center’s divisible revenues will be transferred to the states and territories of the Union, and the costs of the main schemes. Schemes of two types are listed. Central sector schemes that are fully funded by the Government of India and central sector schemes that are jointly funded by the central and state governments.
Income and expenses
These two documents listed in detail the various sources of revenue and heads of expenditure. The revenue budget breaks down what is expected from income tax, income tax, GST, excise duties, etc. and non-tax sources such as divestment, privatization, telecommunications, aviation and other revenues.
The expenditure budget provides a ministerial breakdown of the size of the budget (total planned expenditure is the size of the budget). Here you can find in detail how much the central government spends on everything, including defense procurement, MGNREGA, PM Kisan, primary education, healthcare, administrative expenses, specific infrastructure projects, etc.
In the end, the speech is just the beginning of a long process. Being a bill, the budget must be passed by Lok Sabha and it will also go to Rajya Sabha. There will be lengthy debates in both houses, and the finance minister will answer all questions. What is adopted is the draft law on finance, which introduces the budget into the law, as well as amending other acts such as the RBI Act, the Income Tax Act, the Company Law, the Legislation of any regulations The draft law / Finance Act provides legal support to the budget
Medium-term fiscal policy
There are many other documents, including this one, that have been mandated by the Law on Fiscal Responsibility and Budget Management. In the medium-term fiscal statement, the central government projects the fiscal deficit, revenue deficit, gross tax and non-tax revenue and central government debt for two years in the future, beyond the next financial year. It also lists its assumptions about the global and Indian economy, on the basis of which he drafted the budget for the following year.