Everything about Union Budget you Must know ! 😱

Everything about Union Budget you Must know ! 😱 - PART 1

Budget Facts

Finance Minister Nirmala Sitharaman became only the second women in the history of independent India to present the first Union Budget of the Modi government on July 5, 2019.

Breaking away from the brown Budget briefcase, Sitharaman held a red parcel like bag with a keyhole on the emblem.

What is a Union Budget?

Under Article 112 of the Constitution of India, the central government is constitutionally bound to lay down the annual financial report of the country.

This Report is commonly known as the Union Budget of India. The Union Budget holds the same character as the budget of other levels of government,except in the source of revenue and expenditure.

The Union Budget also includes the F i n a n c e B i l l a n d Appropriation Bill, both of which are to be passed by both Houses of Parliament before implementation on April 1 of the new financial year.

Difference between Interim Budget and Full Budget

The outgoing government announces an Interim Budget or Vote on Account in February which is followed by a full budget by the new government in a few months time after the elections.

A key point of difference between Interim Budget and a full-fledged Union budget is that the former is only valid for two months (until the new government presents its budget) while the latter is for a whole year.

"First woman to present Union Budget"

Former Prime Minister Indira Gandhi was the first women till now to have presented the Union Budget. In 1970, she presented the Union Budget of India for 1970-71,after she took over the finance portfolio following the resignation of Morarji Desai as finance minister.

Lesser-known facts about the history of Union Budget of India:

1. India has had 26 finance ministers since Independence. The word 'budget' has been derived from 'bougette' which refers to a leather bag in French.

2. Budget was introduced for the first time in India on April 7, 1860, by the East India Company to the British Crown. A company which now has an India owner, Sanjiv Mehta, a Mumbai-born entrepreneur who successfully claimed it in 2005.

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Budget Glossary

"Important terms to understand Union Budget"

1. ANNUAL FINANCIAL STATEMENT

Article 112 of the Constitution requires the government to present to Parliament a statement of estimated receipts and expenditure in respect of every financial year - April 1 to March 31. This statement is the annual financial statement.

The annual financial statement is usually a white 10-page document. It is divided into three parts, consolidated fund, contingency fund and public account. For each of these funds, the government has to present a statement of receipts and expenditure.

2. Consolidated Fund.

This is the most important of all government funds. All revenues raised by the government, money borrowed and receipts from loans given by the government flow into the consolidated fund of India.

All government expenditure is made from this fund, except for exceptional items met from the Contingency Fund or the Public Account. Importantly, no money can be withdrawn from this fund without the Parliament's approval .

3.Contingency Fund

As the name suggests, any urgent or unforeseen expenditure is met from this fund. The Rs 500-crore fund is at the disposal of the President. Any receipts from the sale would go under capital account. On the other hand, if the government gives someone a loan from which it expects to receive interest, that expenditure would go under the capital account. In respect of all the funds the government has to prepare a revenue budget (detailing revenue receipts and revenue expenditure) and a capital budget (capital receipts and capital expenditure). Contingency fund is clearly not that important. Public account is important in that it gives a view of select savings and how they are being used, but not that relevant from a budget perspective. The consolidated fund is the key to the budget.

PART 2 WILL BE LIVE SOON !