Understanding the Union Budget before the government presents this year’s numbers

Knowing about the logistics of our country’s administration is empowering. It allows us to have a holistic perspective of the state of the economy. It should be of direct interest to us. Unfortunately, not many people actively try and understand the allocation of the nation’s financial resources. As the budget for the new year will be unfolding on February 1, we can revise our basic concepts of it so that when the new figures come, we can have a better understanding of the situation.

What is the union budget?

The Union budget is a mandate released by the central government. It is a financial statement that covers all the revenues and expenditures estimated for the coming financial year. Started back in 1947, it was a task that would help to review the status of the economy. Various proposals are made for the betterment of the economy.

When are the proposals applied to the budget?

The proposals need to go through the Parliament and get cleared before they are applied to the budget. Once it passes through the Parliament, it takes effect from April 1 every year – that is the start of the financial year. In years when the budget session falls a few months before the Lok Sabha elections, an interim budget is set by the existing government so that the new government can come and make the final budget for the year.

Who presents the budget and when?

The budget is presented by the Finance Minister of the country on February 1 every year. This has been the case since 2017, before which the budget would be presented on the last date of February. This year it will be presented by Nirmala Sitharaman. She has been presenting the budget since 2019. The first budget of our country was presented by RK Shanmukham Chetty.

The budget is further divided into two parts- the capital budget and the revenue budget. The capital budget includes investment, borrowings, and creation of assets, while the revenue budget includes revenue receipts and expenditures like tax revenue and non-tax revenue. Therefore, keeping track of how the government allocates the nation’s money is the civic duty and right of every citizen.