Union Budget and its types
What is Union Budget ? A budget is a financial plan that outlines the expected income and expenses for a defined period.
In business context, Budget can be a roadmap guiding resource allocation to achieve organizational goals and objectives efficiently. It also includes assumptions of future fund needs, setting spending limits, and minimizing debt. A well-structured budget provides a clear picture of income and expense sources, which helps keep track of expenses to maintain financial stability. In addition, it assists in identifying cost-cutting areas and saving for potential investments in the future.
Review the budget regularly to ensure its relevance to the changing market conditions. So, the budget helps businesses and individuals make well-informed financial decisions and control their overall financial health.
Union budget – According to Article 112 of the Indian Constitution, the Union Budget of a year, also referred to as the annual financial statement, is a statement of the estimated receipts and expenditure of the government for that particular year.
Union Budget keeps the account of the government’s finances for the fiscal year that runs from 1st April to 31st March. Union Budget is classified into Revenue Budget and Capital Budget.
Revenue budget– includes the government’s revenue receipts and expenditure. There are two kinds of revenue receipts – tax and non-tax revenue. Revenue expenditure is the expenditure incurred on day to day functioning of the government and on various services offered to citizens. If revenue expenditure exceeds revenue receipts, the government incurs a revenue deficit.
Capital Budget -includes capital receipts and payments of the government. Loans from public, foreign governments and RBI form a major part of the government’s capital receipts. Capital expenditure is the expenditure on development of machinery, equipment, building, health facilities, education etc. Fiscal deficit is incurred when the government’s total expenditure exceeds its total revenue.
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