WHAT DOES ANNUAL FINANCIAL BUDGET MEAN?

A budget is an annual financial plan that outlines how the government will raise and spend money in the upcoming fiscal year. Budgets are important for governments because they allow them to plan for and prioritize spending on various programs and services, and to ensure that they have enough money to cover their expenses.

BUDGET PROPOSAL IN INDIA:

In India, the process of creating the annual budget begins with the Ministry of Finance, led by the finance minister, preparing a budget proposal. The proposal is based on the government's economic and financial policies, as well as input from various government departments and agencies.

The budget proposal is then presented to the Cabinet for approval before being presented to the Parliament. Before the budget is presented, the finance minister presents the Economic Survey, which reviews the economic performance of the country during the previous fiscal year and presents an outlook for the current fiscal year.

SCHEDULED PERIOD OF BUDGET PROPOSAL:

The Budget Session of the Parliament typically begins in February and the Union Budget is presented on the last day of the month or the first day of next month.

TWO DIVISIONS OF UNION BUDGET:

The Union Budget is divided into two parts, the Railway Budget, and the General Budget. The Railway Budget is presented separately by the Minister of Railways and the General Budget is presented by the finance minister.

PARTICULARS UNDER GENERAL BUDGET:

The categories covered in a general budget typically include:

Revenue:

This includes all the sources of income for the government, such as taxes, fees, and other charges. The budget will outline the government's revenue projections for the upcoming fiscal year and how it plans to raise revenue.

Expenditure:

This includes all the money that the government plans to spend in the upcoming fiscal year. The budget will outline the government's spending plans and priorities, including how much money will be allocated to different departments and programs.

Capital Expenditure:

This includes money spent on long-term investments such as infrastructure projects and government buildings.

Development Expenditure:

This includes money spent on social and economic development programs, such as education, healthcare, and housing.

Subsidies:

This includes money paid directly to individuals or organizations to support specific goods or services, such as food, fuel, or fertilizers.

Interest payments:

This includes money paid towards interest on loans taken by the government.

Defence:

This includes money allocated for defence-related expenses, such as military equipment and personnel costs.

Transfers:

This includes money transferred to other levels of government, such as state and local governments, as well as money transferred to public sector undertakings and autonomous bodies.

Tax Proposals:

This includes changes in tax rates and tax laws, exemptions, and deductions.

The budget will also include information on the government's fiscal deficit, which is the difference between its revenue and expenditure, and its debt, which is the total amount of money the government owes to its creditors.

PARTICULARS UNDER RAILWAY BUDGET:

The Railway Budget is a separate budget presented by the Minister of Railways in India. It covers the financial performance and plans of the Indian Railways, which is one of the largest rail networks in the world and is a key mode of transportation for people and goods in India.

The Railway Budget typically covers the following categories:

Revenue:

This includes the railway's projected income from passenger and freight traffic, as well as other sources of revenue such as advertising and real estate.

Expenditure:

This includes the railway's projected expenses, including the cost of maintaining and upgrading the rail network, employee salaries and benefits, and the cost of new projects and equipment.

Capital Expenditure:

This includes the money spent on long-term investments such as building new railway lines, purchasing new trains and equipment, and upgrading existing infrastructure.

Safety:

This includes measures taken to improve safety on the railway network, such as the installation of CCTV cameras, upgrading signalling systems, and the elimination of level crossings.

Services:

This includes measures taken to improve the quality of service for passengers, such as the introduction of new trains, the upgrading of existing trains, and the construction of new railway stations.

Passenger Amenities:

This includes the facilities provided to the passengers like cleanliness, catering, booking offices etc.

Freight:

This includes measures taken to improve the efficiency of the railway's freight operations and to attract more freight traffic to the railway network.

Financial Performance:

This includes the railway's operating ratio, which is the percentage of revenue spent on operating expenses, as well as information on the railway's debt and financial health.

The railway budget also includes the allocation of funds for various railway projects, which could be new lines, gauge conversion, doubling and electrification, and any proposal for new trains or services.

In recent years, Government has also started to use digital mediums to present the budget, where the budget documents are made available online for the public.