Union Budget 101 – #BudgetKaMatlab

Podcast Duration: 09:10

Hello friends!

Welcome to a new podcast this new year from Angel One.

You must have heard the term ‘budget’ making a buzz in the news and financial discussions all around you. That is because India ka Union Budget 2021-22 iss February 1st ko announce hone wala hai. Budget ke baare me baat toh har saal hoti hai. Aur kyun na ho? After all it is probably the biggest financial event annually for India.

Lekin agar aap iss budget ke baare me zyaada nahi jaante, don’t worry. Keep listening because today we are going to understand the budget in detail. At the end of this podcast you will be well-versed with what the Union budget is, how it is made, why is it so important to the economy, how it affects the common man, and also get some insights about what to expect from the new budget that’s due to come.

Toh chaliye, time waste kiye bina let’s get started already. Jaan lete hain #BudgetKaMatlab.

So what is the Union budget?

Union Budget of India basically hamare desh ka ek thorough Annual Financial Statement hai. Union Budget me government ke finances, revenues aur expected expenditures detail me diye jaate hain. Indian Constitution ke article 112 ke anusaar government uss financial year yaani ki April 1 se lekar March 31 tak ke apne estimated receipts aur expenditure ka statement, Parliament ke dono houses ko present karti hai.

India ke Finance Minister iss budget ko present karte hain. Iske kai parts hain:

First, the Annual Financial Statement which snapshots last year's financial performance. Then it has the Demands for Grants jo ki spending ministries ka request hota hai for expenditure. Ye grants approve hote hain by the Appropriation or ‘Spending’ Bill which authorizes the government to spend the funds. Then comes the Finance Bill which includes the government’s proposal for changes to the current tax structure and it is submitted to the Parliament. Finance Bill sirf Lok Sabha me introduce kiya jaata hai, lekin Rajya Sabha se recommendations mil sakti hain.

In sab documents ke alawa budget me next financial year ka Macro-economic framework bhi hota hai. Ye statement country ke growth prospects ko outline karta hai while elaborating on GDP growth, production, prices, financial markets, industries, external sectors, the Central government’s finances.

MTFP yani Medium Term Fiscal Policy ek aur statement hota hai and ye received revenue and expenditure ke balance ko examine karta hai. It also states how capital, including borrowed funds, will be used to generate new revenue.

Next, the Expenditure Profile which is a complete picture of total money spent on revenue generation and operations. While the Expenditure Budget shows the funds allotted to different ministries, sectors, and departments for a financial year.

Lastly, the Receipts Budget shows a detailed summary of tax revenue, non-tax revenue and capital receipts of the government. Isme expenditure trends aur debt position bhi shaamil hote hain.

While it is complex, the Union budget is essentially very similar to a budget. It reflects on past financial activity, evaluates the current debt and income, sets goals for the future, and allocates a spending structure to achieve them.

Aapne capital budget aur revenue budget ke baare me suna hoga. Ye dono hi budget ka hissa hain. Chaliye inka difference jaan lete hain.

Capital budget me public aur RBI se loans ki details di jaati hai. Naye health, development aur education facilities build karne ke liye jo expenditure hua hai, ye bhi capital budget me liste hota hai.

Revenue budget me taxes aur uske alawa received revenue aur government operations me spend huye revenue ka record hota hai. Agar saal me ye expenditure inn revenue receipts se zyaada hota hai, toh usse revenue defecit maana jata hai.

Chaliye jaan lete hain ki ye budget banta kaise hai aur fund allocation kaise decide hoti hai.

Union budget finance ministry aur doosre ministries ke careful calculations ke baad banta hai. Ministries, institutions, states, and union territories make their financial plans for the next year and present it to the finance minister - who works closely with advisors, experts, economists and other bodies to prepare the budget.

Budget ke liye circular September me introduce hota hai. It is the beginning of the budget process. Ministries aur departments apne demands finance ministry ko send karne ke baad, the 54 Union ministries and the Department of Expenditure have many consultations with each other.

After this, according to Article 117 of the Indian constitution, the President recommends for the Budget to be presented before the Lok Sabha by the finance minister. Budget usi din Lok Sabha me present nahin ki jaati.

Budget present hone ke immediately baad Finance Bill introduce kiya jaata hai, jisme government ke naye financial proposals aur plans list kiye jaate hain. This completes the budget-making process.

Did you know that in 2014, the budgetary process was undertaken twice? The reason is interesting. In an election year, the budgets can be presented twice. The first budget aims to secure a Vote on Account for the next few months. And the second one is a complete budget.

I know ye kaafi technical information ho gaya. I hope you are keeping up.

But why make the effort to understand the budget? It is because the Union budget is crucial for the economy and life in the country.

As mentioned earlier, the Union Budget’s general aim is to present annual financial records and plans of the government, and ensure that funds are managed and optimized for the economic growth of our country. It helps the government to fulfil its duties of ensuring equality, justice, and welfare for all. Toh dekh lete hain ki ye Union budget kaunse important roles play karti hai:

-First, government ke resources hamare society ke welfare ke liye allocate hota hai.

-Revenue is used to create employment and new opportunities for growth.

-Welfare programmes are introduced and funded to ensure citizens with lower income can have the necessities like food, shelter, education, and access to health care.

-Higher income brackets ke liye taxes aur lower income brackets ke liye subsidies ke zariye the Union Budget aims for a fair distribution of income.

-Menhagyi aur economic fluctuations ko control karne ke liye Union budget kai steps propose karti hai. Ye desh ki economic stability maintain karne ke liye kiya jaata hai.

-Union Budget me tax structure ke changes bhi mention hoti hain.

-Iss sab ke wajah se Union Budget India ke liye bahut hi important hai kyunki iska effect India ke economic status aur citizens ke life par rahta hai.

Economy par budget ke implication ko toh humne samajh liya. Lekin how does it affect the common man? 2021-22 ke budget ke kuch speculations bhi dekh lete hain.

Budget ke wajah se aam aadmi ke roz ki life me bahut si changes aa sakti hain. These changes can be due to change in tax rates, sector performance, policies, and more. Hum jaante hain ki budget outlines different tax rates for citizens spending on their range of income. Lekin taxable income par kai deductions mil sakti hain, jo budget me introduce ho sakti hain.

Ek example dekh lete hain of why it is relevant. Income Tax Act ke Section 80C se according, specific financial instruments me invest karne par our total taxable income can decrease upto 1.5 Lakhs. Now this limit has been there since 2014. 2021 tak prices ke saath saath expenditures bhi badh rahi hain. Aur more importantly, investments bhi badh rahe hain. Iss cheez ko dhyaan me rakhte huye 2021-22 ke budget me ye limit badhne ki possisbility hai. Issey investment sentiment par kaafi bada impact padega. Government naye savings aur investments schemes bhi introduce karti hai to boost specific sectors or groups. Iska knowledge rehne se aap apne liye appropriate schemes choose kar sakte hain.

Health insurance aur medical expenses par bhi aap deductions paa sakte hain. COVID-19 pandemic ko consider karte huye, the government plans to invest more and support the citizens in this global health crisis. Apart from policy level changes, naye budget me aam logon ke health insurance aur medical costs ke liye taxable income deduction limit badh sakti hai. Iska effect kaafi important ho sakta hai, for example.

Budget ki jaankari rakhne se aapke investment portfolio improve ho sakti hai. When a sector gets significant funding by the budget, usually usme investors ka interest bhi badh jaata hai. By studying the budget and past performance, aap ek sector ki future performance speculate kar sakte hain.

Friends, this was Union Budget 101. Hope it was not a lot to process at once. And I hope you enjoyed learning.

To know more about the new budget, check out other podcasts, videos and blogs on the Budget 2021-22 by Angel One.