Budget making process in india

1. Budget Making Process In India Developed By Ekalavvya A site for Current Affairs & General Studies Mail: [email protected] Visit Us: www.ekalavvya.com

2. How The Budget Is Prepared The ‘Annual Financial Statement’, laid before both the Houses of Parliament constitutes the Budget of the Union Government. This statement takes into account a period of one financial year. The financial year commences in India on 1st April each year. This statement is called the union budget, which contains broadly, the budget speech, a breakdown of the detailed spending proposals of each ministry, as well as revenue raising proposals.

3. The Union Budget is an annual statement of how much money the Government expects to raise and how it will spend the money in the next financial year The Budget uses two different sets of classifications — Plan vs Non-plan and Capital vs Revenue expenditure Capital Expenditure either creates assets or reduces liabilities Revenue Expenditure does not create assets

4. Expenditure on schemes and projects covered by the five- year Plans is known as Plan Expenditure Ongoing expenditure by the government not covered by the Plans is put under Non Plan Expenditure The Planning Commission is the main agency through which all discussions on the Plan Expenditure is held The excess of total government expenditure over total receipts is called the fiscal deficit and is funded by borrowing

5. The difference between revenue receipts and expenditure is called the revenue deficit Part A of the Budget speech deals with general economic survey of the country while Part B relates to taxation proposals The Budget of the Indian Railways is presented separately to Parliament

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7. Developed By A site for Current Affairs & General Studies Mail: [email protected] Visit Us: www.ekalavvya.com