{"id":36400,"date":"2025-01-29T19:16:35","date_gmt":"2025-01-29T13:46:35","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=36400"},"modified":"2025-01-29T19:16:37","modified_gmt":"2025-01-29T13:46:37","slug":"union-budget","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/29-01-2025\/union-budget","title":{"rendered":"Union Budget"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Budget, tabled in Parliament by the Finance Minister, is the Government\u2019s blueprint on expenditure, taxes it plans to levy, which affect the economy and lives of citizens.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>About<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Union Budget of India, referred to as the <strong>annual Financial Statement in Article 112<\/strong> of the Constitution of India, is the annual budget of the Republic of India, presented each year by the Finance Minister.<\/li>\n\n\n\n<li>The budget has to be <strong>passed by the House<\/strong> before it can come into effect on April 1, the start of India&#8217;s financial year.<\/li>\n\n\n\n<li>After being presented separately for 92 years, the Railway budget was merged in the Union Budget in 2017 and presented together on the recommendation of the Bibek Debroy Committee.<\/li>\n\n\n\n<li>In 2019, <strong>Nirmala Sitharaman became the second woman<\/strong> to have presented the budget after Indira Gandhi.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Components of Budget<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>There are three major components <\/strong>\u2014 expenditure, receipts and deficit indicators.&nbsp;<\/li>\n\n\n\n<li><strong>Total Expenditure <\/strong>can be <strong>divided into capital and revenue expenditure.&nbsp;<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>Capital expenditure<\/strong> is incurred with the purpose of increasing assets of a durable nature or of reducing recurring liabilities.\n<ul class=\"wp-block-list\">\n<li>Expenditure incurred for constructing new schools or new hospitals are classified as capital expenditure as they <strong>lead to creation of new assets.&nbsp;<\/strong><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Revenue expenditure <\/strong>involves any expenditure that <strong>does not add to assets or reduce liabilities.&nbsp;<\/strong>\n<ul class=\"wp-block-list\">\n<li>Includes expenditure on the payment of wages and salaries, subsidies or interest payments.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>The receipts of the Government have three components <\/strong>\u2014 revenue receipts, non-debt capital receipts and debt-creating capital receipts.\n<ul class=\"wp-block-list\">\n<li><strong>Revenue receipts <\/strong>involve receipts that are not associated with increase in liabilities and comprise revenue from taxes and non-tax sources.&nbsp;<\/li>\n\n\n\n<li><strong>Non-debt receipts<\/strong> are part of capital receipts that do not generate additional liabilities, it includes recovery of loans and proceeds from disinvestments.&nbsp;<\/li>\n\n\n\n<li><strong>Debt-creating capital receipts <\/strong>are ones that involve higher liabilities and future payment commitments of the Government.&nbsp;<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Fiscal deficit<\/strong> is the difference between total expenditure and the sum of revenue receipts and non-debt receipts.\n<ul class=\"wp-block-list\">\n<li>It indicates how much the Government is spending in net terms.&nbsp;<\/li>\n\n\n\n<li><strong>Positive fiscal deficits indicate <\/strong>the amount of expenditure over and above revenue and non-debt receipts, it needs to be financed by a debt-creating capital receipt.&nbsp;<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Implications of Budget on Economy<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Economic Growth:<\/strong> It stimulates growth through government spending on infrastructure, welfare, and reforms that boost private investment.<\/li>\n\n\n\n<li><strong>Inflation Control: <\/strong>The budget&#8217;s fiscal policies influence inflation through subsidy changes, tax adjustments, and debt management.<\/li>\n\n\n\n<li><strong>Fiscal Deficit and Debt: <\/strong>A high fiscal deficit leads to increased borrowing and higher debt, affecting inflation and interest rates, while efforts to reduce it help fiscal stability.<\/li>\n\n\n\n<li><strong>Taxation and Reforms: <\/strong>Changes in taxes affect consumer behavior, business investment, and government revenue. Reforms like GST and direct tax changes improve efficiency.<\/li>\n\n\n\n<li><strong>Employment: <\/strong>Budget allocations for infrastructure, skill development, and welfare programs create jobs and reduce poverty.<\/li>\n\n\n\n<li><strong>Foreign Investment:<\/strong> Favorable policies attract Foreign Direct Investment (FDI) by improving the ease of doing business.<\/li>\n\n\n\n<li><strong>Social Welfare: <\/strong>Increases in welfare spending and subsidies help reduce poverty and improve living standards.<\/li>\n\n\n\n<li><strong>Stock Market Impact:<\/strong> The budget influences market sentiment based on policy changes related to taxation, industry incentives, and reforms.<\/li>\n\n\n\n<li><strong>Sustainability:<\/strong> Investments in green infrastructure and renewable energy promote sustainable growth and address environmental concerns.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-background\" style=\"background-color:#fff2cc\"><tbody><tr><td><strong>Fiscal Rules<\/strong><br>&#8211; Fiscal rules provide specific policy targets on the basis of which fiscal policy is formed.&nbsp;<br>&#8211; In India\u2019s case, its present fiscal rule is guided by the recommendations of the <strong>N.K. Singh Committee Report.&nbsp;<\/strong><br>1. <strong>It has three policy targets <\/strong>\u2014 maintaining a specific level of debt-GDP ratio (stock target), fiscal deficit-GDP ratio (flow target) and revenue deficit-GDP ratio (composition target).<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/epaper.thehindu.com\/ccidist-ws\/th\/th_delhi\/issues\/117663\/OPS\/GAHDTMUAL.1+G0NDTOVIO.1.html\" rel=\"nofollow noopener\" target=\"_blank\"><strong>TH<\/strong><\/a><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Budget, tabled in Parliament by the Finance Minister, is the Government\u2019s blueprint on expenditure, taxes it plans to levy, which affect the economy and lives of citizens.<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-36400","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/36400","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=36400"}],"version-history":[{"count":2,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/36400\/revisions"}],"predecessor-version":[{"id":36414,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/36400\/revisions\/36414"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=36400"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=36400"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=36400"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}