Written by Anu, a graduate student
We have often seen elders at home making a list for daily or monthly expenditures. In fact, every house has a budget. This is really what a budget is about – about looking at how much money you have in all and then deciding where and how much to spend it.
While families do that for their households, governments do that for countries
So, what’s the Budget of India?
In simple terms, we can say it is a financial presentation for the upcoming projects the government is planning for the citizens. The government presents it on the first day of February and all things proposed in the budget are to be finalized before the beginning of the new financial year in April.
The budget is put in place for efficient allocation of resources, changes in tax slabs, keep a check on prices of essential communities. It helps the government reduce unemployment and poverty levels. It is also helpful in giving an estimate of receipts and expenditure by the government for that particular year.
The Budget of India is presented by the finance minister of India in the parliament. It is presented in the form of a finance bill and has to be passed by the Lok Sabha before it can come into effect on 1st April.
In the olden days, when kings ruled, they carried a bag which they called their ‘Khazana’ this tradition is carried out by our government till date. On the presentation day, the Finance Minister carries a briefcase which has the budget document that is akin to treasures of the Kings.
In theory, there are three types of budgets. The type of budget depends on the feasibility of the estimates.
The three types of budgets are:
- Balanced Budget – It is a balanced budget when estimated government expenditure is equal to expected government receipts in a particular financial year, like a balanced economy, and maintains fiscal discipline. But it does not ensure financial stability in times of economic depression or deflation.
- Surplus Budget – A government budget is said to be a surplus budget if the expected government revenues exceed the estimated government expenditure.
- Deficit Budget – A government budget is said to be a deficit budget if the government’s estimated expenditures exceed the expected government’s revenues in a particular financial year. This is the ideal type of budget for developing economies like ours.
So from here, we can simply get that what a budget refers to and why it is so important. It is actually a big responsibility on the shoulders of our government.
Clearly, a good budget forms the foundation of that particular fiscal year and it is a huge responsibility for the ruling party. This is why there is so much analysis done by various organizations and individuals the day budget comes. In fact, every household talks about the budget. It is one of the biggest days for the elected government when the budget is to be announced.
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