Budget 2024 | What is the Union Budget?

As all eyes are set on the Union Budget presentation that will take place on February 1, here is a look at what the Union budget is and some of key aspects involved.

What is the Union Budget?

The Union Budget is the government's financial roadmap for the upcoming fiscal year, detailing its revenue and expenditure plans. It is presented annually in Parliament by the Finance Minister and comprises three components: the revenue budget, the capital budget, and the fiscal deficit.

The revenue budget focuses on the government's day-to-day expenses, including salaries, pensions, and subsidies. On the other hand, the capital budget deals with capital expenditure, such as investments in infrastructure, assets, and development projects. Striking a balance between these budgets is crucial for sustaining economic growth and stability.

One of the key aspects of the Union Budget is taxation. The government outlines its taxation policies, including changes in income tax rates, corporate taxes, and indirect taxes like GST. These decisions have far-reaching implications, influencing not only individual finances but also corporate strategies and market dynamics.

The fiscal deficit, the third key component, represents the gap between government expenditure and revenue. A controlled fiscal deficit is essential for maintaining economic stability, as an excessive deficit can lead to inflation and economic imbalances.

The Union Budget also serves as a platform to announce policies and initiatives aimed at stimulating economic growth, addressing social issues, and promoting overall welfare. It reflects the government's priorities and strategies to achieve its economic objectives.

Understanding the Union Budget is crucial for citizens and businesses alike, as it directly impacts their financial well-being. From income tax reforms to infrastructure investments, the decisions outlined in the budget shape the economic landscape for the year ahead.

The Union Budget remains a cornerstone of fiscal planning and governance, influencing the economic trajectory of the country.

Though the Union Budget speech is presented by the Finance Minister a whole lot of people are involved in the preparation of it. The Union Budget is prepared by the Budget Division under the Department of Economic Affairs, which operates under the Union Ministry of Finance.

The process begins about six months prior to the presentation of the budget, around August-September of the previous year. The Union Finance Ministry issues circulars to all ministries, states and union territories for them to prepare estimates for the upcoming financial year.