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What is Budget?

Topics Covered: Government Budgeting.

What is Budget?

Context:

Nirmala Sitharaman presents first-ever paperless Budget.

What is Budget?

According to Article 112 of the Indian Constitution, the Union Budget of a year is referred to as the Annual Financial Statement (AFS).

It is a statement of the estimated receipts and expenditure of the Government in a financial year. In addition to it, the Budget contains:

  1. Estimates of revenue and capital receipts,
  2. Ways and means to raise the revenue,
  3. Estimates of expenditure,
  4. Details of the actual receipts and expenditure of the closing financial year and the reasons for any deficit or surplus in that year, and
  5. The economic and financial policy of the coming year, i.e., taxation proposals, prospects of revenue, spending programme and introduction of new schemes/projects.

The Budget goes through six stages:

  1. Presentation of Budget.
  2. General discussion.
  3. Scrutiny by Departmental Committees.
  4. Voting on Demands for Grants.
  5. Passing of Appropriation Bill.
  6. Passing of Finance Bill.

List of Important Schemes in the latest Union Budget:

Health and well being:

  1. PM Atmanirbhar Swasth Bharat Yojana: To be launched to develop primary, secondary and tertiary healthcare systems, strengthen existing health systems and support future health interventions with an outlay of about 64,180 crores over 6 years.
  2. Mission Poshan 2.0 to be launched to improve nutritional outcomes across 112 aspirational districts.
  3. Jal Jivan Urban Mission: To be implemented over five years with an outlay of Rs 2.87 lakh crore.
  4. Voluntary Vehicle Scrapping Policy to phase out old vehicles and reduce vehicular pollution: vehicles will undergo fitness tests after 20 years in private vehicles, 15 years in case of commercial vehicles.
  5. Pneumococcal vaccine rollout: The pneumococcal vaccine, which is limited to only 5 states at present, will be rolled out across the country.
  6. Swachh Bharat Mission (Urban) 2.0 would be implemented over five years — from 2021 to 2026 — on an outlay of ₹1.41 lakh crore.

Infrastructure:

  1. Mega Investment Textile Parks- 7 textile parks will be added in the next three years.
  2. Proposal to set up Development Finance Institution at a cost of Rs 20,000 crore.
  3. A national monetising pipeline will be launched and a dashboard will be created to overlook the progress.
  4. The Indian Railways has prepared a National Rail Plan for India 2030. The plan is to create a future-ready railways system by 2030.
  5. New scheme to be launched to support augmentation of public bus service.
  6. MetroLite and MetroNeo to be introduced in Tier 2 cities and peripheral areas of Tier 1 cities.
  7. A framework to allow consumers of electricity alternatives to choose from more than one distribution company.
  8. National Hydrogen Mission for generating hydrogen from green power sources.
  9. The major ports will be moved from operating services on their own and they can enter into public-private partnership to get private players to operate and manage it for them.
  10. Ujjwala scheme, which has benefited 8 crore households so far, will be extended to cover 1 crore more beneficiaries.
  11. Gas pipeline network to be taken up in J&K union territory and City Gas Distribution (CGD) programme will be extended to 100 districts in next three years.

Financial:

  1. Single securities market code: Centre to consolidate the provisions of the Sebi Act, Depositories Act and two other laws, into a Unified Securities Market Code.
  2. Investor Charter: Investor Charter to be introduced as a right for all investors in all financial products to enable investor protection.

Agriculture:

  1. Operation Green Scheme to be enlarged to cover 22 perishable crops.
  2. 1000 more mandis to be integrated with E-NAM market place.
  3. Agricultural Infrastructure funds will be made available to APMCs for augmenting their infrastructure.
  4. Five major fishing harbours to be developed into fishing hubs for economic activity including Chennai, Kochi, Paradip, Petuaghat and Visakhapatnam.
  5. Seaweed farming to be promoted -Multipurpose seaweed park to be established in Tamil Nadu.
  6. An Agriculture Infrastructure and Development Cess (AIDC) on select items such as petrol, diesel, apples and alcohol.

Science and technology:

National Research Foundation (NRF) — an umbrella body that is expected to fund research across a range of disciplines, from science and technology to humanities. The NRF would be an autonomous body and represented by all major research and education bodies.

Defence:

Major recommendations of the 15th FC that were incorporated into the Union budget include:

  1. Boost in health spending.
  2. Higher borrowing limits for states.
  3. A consolidation of Centrally-sponsored schemes or public programmes implemented by states but largely funded by the Union government.
  4. Creation of a non-lapsable defence and internal security fund either through allocation from the divisible pool of funds shared by the Centre and states or through a cess.

Taxation:

  1. To extend tax holiday for start-ups until March-end next year
  2. To extend the capital gains exemption for investment in start-ups by another year to encourage funding in the sector.
  3. To incentivise one-person companies (OPCs) by allowing them to grow without any restrictions on paid-up capital and turnover.

Sources: PIB.