It is less than a month left before Narendra Modi-led government presents the last Budget of its term — for the financial year 2019-2020. With the general elections due in April, it is going to garner a lot of eyeballs. Here is all that you must know about the budget.
The budget presented in the parliament is much more than an account of taxes levied by the government of India. In broad terms, it approximates government expenditures in the upcoming financial year and also estimates its receipts. Therefore, it largely deals with where the government money is going to be spent and from where is that money going to be generated.
The budget is also important because it lists out various welfare schemes, programmes and policy statements and economic reforms where the government is going to spend resources and money.
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The budget is prepared by the Ministry of Finance after consultations with various other ministries and taking into account their requirements of funds. It is presented by the Finance Minister in the Parliament, though, it is the Prime Minister who gives final approval.
The government gets its money from taxes, such as: Income Tax, Corporate Tax, GST, Customs Duty, Excise Duty etc. GST is not a part of the budget. It also gets money from non-tax sources such as interest, fees, fines and money generated from services offered. It also raises money from capital receipts such as asset sale, disinvestment and borrowings.
The money that the government gets is spent on various sectors of the economy such as agriculture, farming, manufacturing, transportation, communications etc. The various ministries ask for allocation of funds, and the Ministry of Finance accedes depending on the money that it has.
Spending by the government is done considering the economic condition of the country to ensure a stable economy. Expenses are also disbursed in accordance to the budgetary policy of the government. The aim is to enable favourable economic reform and the development and welfare of the people.
The budget governs the way money flows through our economy and it inevitably has a direct impact on our pockets. The prices of goods and services, the disposable income available in each household and the standard of living gets affected by the budget. Apart from that, the budget is often used by the political parties as a political tool to appease voters.