Union Budget 2019-20: Union Budget is the most comprehensive report of the government’s finances in which revenues from all sources and outlays for all activities are consolidated for a particular financial year, which runs from April 1 to March 31. The budget is expected to be presented on February 1, 2019, by Finance Minister Arun Jaitley in the Parliament. This will be Jaitely’s sixth consecutive Budget and his last before the upcoming general elections, scheduled to be held in March-April this year.
Here are the top 10 budget terms you should know.
Annual Financial Statement
The annual financial statement is the most important document in the budget. Under Article 112 of the Constitution, the government has to present a statement of estimated revenue and expenditure for every fiscal. This statement is called the annual financial statement. This document is divided into three sections -consolidated fund, contingency fund and public account. For each of these funds, the central government is required to present a statement of revenue and expenditure.
Consolidated Fund of India
This includes all revenues raised by the central government, money borrowed and receipts from loans given by the government. Except certain exceptional items met from Contingency Fund and Public Account, all expenditures of the government are made from this account. However, no money can be appropriated from the Fund, except in accordance with the law.
Contingency Fund of India
Contingency Fund of India is constituted at the disposal of the President of India. It enables the President to make advances to the executive or the government to meet urgent unforeseen expenditure.
Motions for reduction to various Demands for Grants are made in the Form of Cut Motions seeking to reduce the sums sought by Government on grounds of economy or difference of opinion on matters of policy or just in order to voice a grievance.
When the government’s non-borrowed receipts fall short of its entire expenditure, it has to borrow money form the public to meet the shortfall. The excess of total expenditure over total non-borrowed receipts is called the fiscal deficit.
The Finance Bill is presented immediately after the presentation of the Union Budget. It has all information on the Imposition, abolition, alteration or regulation of taxes proposed in the Budget.
Public Account is formed under provisions of Article 266(1) of the Constitution of India, in relation to all the fund that flows where the government is acting as a banker. For instance, it includes Provident Funds and Small Savings. The government, however, does not have any right on this money as it has to be returned to the depositors. The expenditure from this fund need not be approved by the Parliament.
The revenue budget comprises of revenue receipts of the government as well as its expenditure. Revenue receipts are divided into tax and non-tax revenue. Tax revenues constitute taxes like income tax, corporate tax, excise, customs, service and other duties that the Government levies. The non-tax revenue sources include interest on loans, dividend on investments.
Revenue deficit is the difference between revenue receipts and revenue expenditure. This deficit is the shortfall of the government’s current receipts over current expenditures.
Vote on Account
The Vote on Account is a grant made in advance by the parliament, with respect to the estimated expenditure for a part of a new financial year, pending the completion of procedure relating to the voting on the Demand for Grants and the passing of the Appropriation Act.