NewsProTeam | Jan 27, 2021 | 0
Here Are All The Key Components Of Budget That You Need To Know
Budget 2021: Finance Minister Nirmala Sitharaman will present Budget 2021 on February 1, 2021. The budget is simply an annual financial statement or financial plan of the government, containing details of revenue and expenditure in the past, along with the estimated spending and projections for the following year. The economic survey presented ahead of the budget, is prepared under the guidance of the Chief Economic Advisor to the government of India. Other than the main budget speech, the budget also comprises a set of documents such as finance bill, annual financial statement, the demand for grants as well as the macroeconomic framework. (Also Read: Budget 2021: 10 Things To Know About First Budget Of Independent India )
Here’s all you need to know about some of the key components of the budget:
Through this document, the government submits its proposals – in terms of abolition, imposition, alteration, remission, or regulation of taxes – to the Parliament
Annual financial statement
The annual financial statement is also known as the budget statement. It contains the details of the estimated receipts as well as expenditure in the year gone by (or revised estimates) as compared to the following year ( or the budget estimates), as well as those incurred in the year before the present financial year (actuals).
Demand for grants
The government is needed to provide details of the estimated expenditure in demand for grants. Usually, one demand for grant is presented in respect of every ministry or department. However, depending on the nature of expenditure, more than one demand may be presented for a ministry or department.
After the demands for grants are voted by the Lok Sabha, the Parliament’s approval to the withdrawal from the Consolidated Fund is sought through the Appropriation Bill. The purpose of the Vote on Account is to keep the government functioning. The Vote on Account is obtained from the Parliament through an Appropriation Bill.
Highlights of Budget
The highlights document explains the key features of the Budget. It indicates the prominent achievements of the nation in various sectors of the economy and also outlines the budget proposals for allocation of funds to be made in significant areas.
Macroeconomic framework statement
The macroeconomic framework statement contains an assessment of the growth prospects of the economy, in terms of gross domestic product (GDP) growth rate as well as fiscal balance.
Memorandum explaining provisions in Finance Bill
This document facilitates the understanding of the taxation proposals contained in the Finance Bill. The memorandum also explains various provisions and their implications.
Budget at a glance
At a glance is a summary of the receipts and disbursements, and also contains a brief description of key terms. It provides broad details of tax and non-tax revenues, plan and non-plan expenditure. It also indicates gross primary deficit, gross fiscal deficit as well as revenue deficit.