Written by Vedika Pathania, a second-year journalism student
For the past 2 weeks, you would have heard the word ‘budget’ everywhere. From news channels to newspapers, everyone is talking about it. The concept can be a little difficult to understand so, before we understand the main points of this year’s Union Budget, let me break it down for you.
The Indian Parliament, i.e., the Lok Sabha and the Rajya Sabha, have 3 sessions each year. They are- Budget Session, Monsoon Session and the Winter Session.
A session of the Indian Parliament is the duration in which a House (the Lok Sabha is the Lower House, and the Rajya Sabha is the Upper House) meets nearly every day to handle the country’s affairs.
On the 1st of February, 2022, our Finance Minister, Nirmala Sitharaman presented the Union Budget for the year 2022-23.
What is a Union Budget and why is it important?
To simplify it – think of it this way. If your mother or father had to look at their earnings for the year and then decide what to spend where – that would be the budget for your house. The government does the same – it looks at all its earnings – as in the money it would receive, mainly from taxes – and then decides how much to spend on what.
So, the annual financial statement, commonly known as the Union Budget, is a description of the government’s expected receipts and expenditures for that specific year.
The Union Budget records the government’s finances for the fiscal year, which runs from April 1 to March 31. The Union Budget is further divided into two parts: revenue and capital.
A ‘fiscal year’ is a term and period used by for financial reporting and budgeting.
Revenue Budget vs Capital Budget
As previously mentioned, the Union Budget is divided into two types, revenue and capital budget.
The revenue budget is made up of the government’s revenue receipts and expenditures. Tax and non-tax revenue are separated. Tax revenues originate from the government’s charges on income tax, corporation tax, excise, customs, service, and other duties. Interest on loans and dividends on assets are examples of non-tax revenue streams.
Capital revenues and payments are included in the Capital Budget. It comprises the Central Government’s stock investments, loans, and advances to state governments, government businesses, corporations, and other parties.
The Union Budget is also classified into three types
A balanced budget is one in which the predicted expenditure equals the expected income in a given fiscal year, and it is founded on the principle that the government’s spending should not exceed its earnings.
A surplus budget is one in which the anticipated income exceeds the anticipated spending in a given fiscal year.
A deficit budget is one in which the projected expenditure exceeds the anticipated revenue.
All you need to know about the 2022-23 Union Budget; some key points
- According to the Union Budget 2022-23, direct and indirect taxes would account for 58 paise for every rupee in the government’s treasury.
- The car, electronics, construction, and consumer goods industries have all gotten a boost in growth. This will aid in the expansion of savings and purchasing power.
- The government plans to create 60 lakh employment in 14 industries under the Productivity Linked Incentive (PLI) initiative. To prepare residents for employment, the focus will be on developing online training through the introduction of the Digital Ecosystem for Skilling and Livelihood (DESH-Stack e-portal).
- As compared to last year, the government has increased the funding for PM Awas Yojana. With a budget of Rs 48,000 crore, they want to build 80 lakh dwellings in 2022-23.
- The government intends to develop the ‘National Tele Mental Health Program,’ which will provide high-quality mental health counselling and therapy.
- The government is focusing on growth engines like as the creation of new ports, energy transformation units, logistics, new airports, and larger and stronger infrastructure projects through the PM Gati Shakti Yojana.