In India, the financial year is considered from 1st April to 31st March. So, a statement of estimated expenditures and receipts of the government in India for a financial year is called budget. An introduction to budget helps you understand all the spending and expenditure by the government in a financial year.
Introduction to Budget
In India, we have a union budget where a certain amount of money is allocated to the various sectors. There are two types of accounts in this, revenue account and capital account. Also, the revenue account includes revenue receipt and revenue expenditure.
Furthermore, in a revenue receipt, there is a tax receipt and non-tax receipt. A tax receipt is the one that the government gets through direct and indirect tax. While in non-tax receipt, the government gets its revenue from fees, interests, fines royalty, grants, dividends of PSUs, etc.
Also, in revenue expenditure, there are development and non-development expenses. The repairment work done for existing assets is termed under revenue expenditure. While the expenses under law and order, defense, salaries are classified into non-development expenses.
Additionally, in the capital account, there are capital expenditure and capital receipts. The capital expenditure includes loans given to state governments, repayment of various loans, loans given to union territories, expenses done on creating the infrastructure, etc.
While in capital receipts, proceeds from the disinvestment sales through government assets, loan recovery, borrowings, and loans, etc are included. Thus, the total receipt is a summation of revenue receipts and capital receipts. While total expense is a summation of capital expenses and revenue expenses.
Types of Budget
This type of budget us a performance budget by various ministries that handles the various development programs. Thus, it comprises of projects and schemes that outlays for all central organization and departments. Also, it was first established in 2005-06.
In this, the ministry or department prepares the budget every year. Also, it is prepared under the assumption that there was a budget in the past. Thus, each item in the budget is allocated on the basis of merit rather than preference.
So, the allocation of the last year has no role in this. Also, this type of budget practicing was introduced by Peter Fieri. Furthermore, it was advocated by Jimmy Carter from the USA.
The main objective of this budget is to mainstream the budget based on the gender perspectives of all sectoral programs and policies. Also, it was done in order to create the environment enable to empower women and gender justice. This was first introduced in 1984 in Australia. In India, gender budgeting was introduced in 2005-06.
Practice Questions on Introduction to Budget
Q. Based on the interim budget of 2019-20, how large is India’s economy?
Answer: B. Sixth
Q. During the interim budget of 2019-20, which north-eastern state in India came to air map with the clearance of the Hollongi airport?
A. West Bengal
B. Arunachal Pradesh
C. Andhra Pradesh
Answer: B. Arunachal Pradesh