About Budget and its Importance

The whole nation will possibly look for several bold reforms in the newly formed budget this Thursday in a strong bid to turn around the economy, which has been going down consistently. Even though major changes to the taxes are not expected, there might still be a lot of positives to look at. The finance minister Mr. Arun Jaitley will put forward his maiden budget after his party won by a landslide victory in the month of May this year. It would not be wrong to admit that the upcoming budget has immense significance and the expectations of the people are also quite high as the party won with majority votes.

The significance of the budget is immense because it will affect the middle and lower income class groups in a strong way. It remains to be seen whether some steps against inflation will be taken by the new government or not. To understand the budget, it is important to be well versed with the key terms and structures.

Have a look at the key terms associated with the budget which you must know about.

Demand for Grants:

The statement of estimates of all the expenses related to various departments and ministries in India are incurred out of India’s consolidated fund. The estimates require the approval of the House of People in India.

Consolidated Fund of India:

All the revenues which are collected by the Indian government in the form of loans raised by it and the various recoveries and receipts of loans granted form the consolidated fund.

Contingency Fund of India:

This is the fund into which the current government of India dips its resources into in times of emergencies for the purpose of meeting some unforeseen expenditures. The fund is a little over Rs 500 Crores at present.

Capital/Revenue Expenditure:

All the expenditures which are incurred with the major objective of acquiring tangible assets that are permanent in nature can be classified as capital expenditure. However, the assets which are acquired for the normal running of the government system are related to revenue expenditure.  

Finance Bill:

The finance bill basically contains all the government proposals for the purpose of imposing some new taxes and modifying the present tax structure in the upcoming year. It forms an integral part of the government’s system.

The General Budget Paper’s Structure:

• Speech of the Finance Minister  
• Specific features of the budget
• Budget at a glance
• Annual Financial Statement
• Finance Bill
• Demand for Grants by the Central Government
• Memorandum Explaining the Provisions in the Finance Bill
• Fiscal Responsibility and Budget management Statement
• Receipts Budget
• Statement of Revenue Foregone
• Implementation of Budget Announcements

The General Procedure in Lok Sabha:

• General Discussion on the Budget
• Vote on Account
• Consideration of Demands for Grants
• Discussion and voting on Demand for Grants
• Appropriation Bill
• Finance Bill

These are some of the most important things which showcase the importance of budget in today’s time. The upcoming budget is one of the highly anticipated ones and we can just hope that it will bring some good fortune for the people of the middle and lower sections of the society.