Budget. We don't mean the daily revenue and expenditure of citizens like you and me, but the collective budget of you and me and every other citizen, the budget of the country. The Union Budget for 2022-23 will be presented today, February 1, at 11 am, by the Finance Minister of the Government of India, Nirmala Sitharaman.
There are many questions that need answers from this 256th budget session, the first half of which will be held from January 31 to February 11 and the second part from March 14 to April 8. Inflation, job creation, the pandemic and healthcare, education and many, many more. The answers are due soon and meanwhile, let's look at answering other questions regarding the budget by peaking into our past.
READ ALSO : What The FAQ: Lower pay and longer hours? What are the new labour codes and when will they come into force?
First things first, what is the Union Budget?
As per Article 112 of the Constitution of India, the Union Budget is, quite simply, the annual budget of the Republic of India. For the fiscal year of 2022-23, which is basically April 1, 2022, to March 31, 2023, financial statements and tax proposals are presented. Basically, it keeps an account of the Government of India's finances. It is prepared by the Ministry of Finance in consultation with other ministries.
Surely, there is more to it. What goes into the making of the budget?
Indeed, there is. The budget is divided into two — Revenue and capital budget.
When it comes to revenue budget, it includes revenue receipts (tax and non-tax revenue) and expenditure. The cost of the government's daily functioning in addition to the cost of offering the many services to citizens constitutes revenue expenditure. When revenue expenditure goes beyond the revenue receipts, it creates a revenue deficit.
Capital receipts and payments of the government are included in the capital budget. Loans, from the public, RBI and others, are what constitute a huge part of the capital receipts of the government. Building educational institutes, health facilities, machinery and beyond — the expenditure on the development of these is called capital expenditure. When the government's total expenditure exceeds its total revenue, a fiscal deficit occurs.
When was the first budget of India presented?
Let's talk about independent India only. On November 26, 1947, Finance Minister RK Shanmukham Chetty presented the first budget. The lawyer and economist did not include a tax proposal and covered only seven months. The total revenue was Rs 171.15 crore, Rs 24.59 crore was the fiscal deficit and the total expenditure was pegged at Rs 197.29 crore.
Why is it presented only on February 1?
The idea is to present it ahead of the beginning of the fiscal year. You'll be surprised to note that until 1999, it was presented on the last day of February at 5 pm, a practice being followed since colonial days, owing to the time difference between India and the UK. It was Yashwant Sinham former Finance Minister who changed the timing from 1999. Furthermore, it was former Finance Minister Arun Jaitley who started presenting the budget on the first day of the month from the year 2017.
How long is the budget usually?
Well, for the then finance minister (FM) Hirubhai Mulljibhai Patel in the year 1977, it was 800 words while for the current FM on February 1, 2020, it lasted for 2 hours and 42 minutes. In fact, she had two more pages remaining but she excused herself because she was feeling ill. The longest, in terms of words, was the one former FM Manmohan Singh delivered in the year 1991. It came up to 18,650 words. So when it comes to how long the budget usually is, your guess is as good as ours.
What are the changes that have occurred when it comes to the presentation of the budget over time?
Another hangover from the colonial times is the briefcase in which the FMs usually used to carry their budget papers, in the UK it was carried in a red box. It was the current FM who went with a bahi khata (a ledger of sorts) instead in the year 2019. In 2020, she switched to a Made in India iPad. The Union Budget Mobile App was also launched ahead of Union Budget 2021-22 session to facilitate hassle-free access. Also, for the first time in 2021, a paperless digital budget was presented. The tradition of printing the budget has been reduced to a bare minimum and there will be no traditional halwa ceremony either where halwa (a kind of sweet) is prepared and served to employees before the budget is presented.
What are the different kinds of budgets?
Mainly there are two. Or should we say were? First was a separate railway budget, which the Modi government decided to merge with the general budget in the year 2016. Then, there is an interim budget that is presented by a government going through a transition or are in their last year of office, ahead of the elections. This was last done in 2019.
What are some of the predictions around the budget?
The Economic Survey was tabled in the Lok Sabha by the FM. It was compiled by Principal Economic Advisor Sanjeev Sanyal and his team. The pre-Budget survey forecasts an 8 to 8.5 per cent GDP growth in the fiscal year. Sanyal went on to highlight that economic activity in the financial year of 2022 has been revived to pre-pandemic levels.
What happens after the budget is presented?
The budget session began with the President's address to both houses on January 31. Once the FM reads out the Budget Speech, which is basically the highlights of the budget, in the Lok Sabha on February 1, a copy is presented in the Rajya Sabha. Also note, there will be no zero hour or question hour today. After this, the process of deliberation and approval of both houses begins.
