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 1st
April and ends on 31st 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.
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