BUDGET India

Budget is the master financial plan of the government. It is an exercise in planning receipts and expenditure of the government in the ensuing year. It regulates the extent of taxation and national expenditure to bring it in line with the economic policies of the government. It covers all kinds of transactions in and outside India including internal borrowing and external assistance. Ideally it should neither lead to inflation nor economic depression.

The budget division of the finance ministry is primarily responsible for the preparation and submission of the budget. However, the railway budget is presented separately in India but is voted upon by the Parliament.

The Planning Commission plays an important role in budget making. It formulates five year plans and also prepares separate plans for each state and each union territory. It lays down the size of the plan and determines priorities.

The budget covers the financial year which starts on 1^st April and ends on 31^st March of the subsequent year. It informs the citizens of the estimated total expenditure of the government and also the different sources from which the government intends to raise the income.

Broadly the sources of income are divided into tax, non tax and capital receipts. Expenditure is classified into non plan revenue and non plan capital expenditure and planned revenue and planned capital expenditure.

The Budget of the Central Government is prepared and presented by the finance minister usually on the last day of the month of February.

Union Budget: Budget gives three sets of figures:

Actual figures for the preceding year

Revised estimates for the current year

Budget estimates for the ensuing year.

All receipts and payments in the budget are shown under two separate heads:

Consolidated funds (revenues) – loans raised, money received in repayment of loans

Public accounts – all receipts and payments which are in nature of a deposit – provident fund, small savings collections.

The main sources of a State’s own tax revenue are:

Sales tax

Sales excise duties

Taxes on property and capital transactions

Taxes on vehicles, passengers and goods

Entertainment tax

Taxes on professions, trades and employment.