1. BUDGET ANALYSIS:
2014-2015
By:-
Pankaj Kakkad (12213013)
Rambabu Kumar (12213015)
Shivam Bhagat (12213016)

2. WHAT IS BUDGET?
A budget is an annual statement of the estimated receipts and
expenditures of the government during a financial year.
(a)This is a financial forecast for the next accounting year.
(b) It sets the sources of government receipts and expenditure for the
coming financial year.
In the words of Prof.Taylor “A budget is a master plan of the
government, it is an imperative instrument of economic policy to
guide the proper allocation of resources”.

3. BUDGET – A FLASH BACK
The budget process of our country predates the independence.
Budget was first introduced on 7th April 1860 .
The first Finance Member ,JamesWilson presented the budget.
Liaquat Ali Khan, member of the interim Govt. presented the budget
of 1947-48.
After independence, India’s first Finance Minister R.K. Shanmukhan
Chetty, presented the 1st budget on 26th November, 1947. and
concentrated on agriculture while over the next ten years the focus
moved to the industrial sector with a focus on forestry, fishing and
textile.

4. 1.Budget Receipts: Budget receipts refers to the total amount
of money which is estimated by the government to be received from
all the sources during a fiscal year .
(a).Revenue Receipts (b).Capital Receipts
2. Budget Expenditure: Budget expenditure refers to an
estimated expenditure of central government, state governments,
local authorities and public corporations, during a fiscal year.
(a). Revenue Expenditure (b). Capital Expenditure
COMPONENTS OF UNION BUDGET

5. KEY POINT:
 Revenue receipts are those receipts which do not create a liability or
which do not reduce assets. It comprise of tax revenue and non-tax
revenue.
 Capital receipts are those receipts which raise funds either by incurring
a liability or by disposing of assets. It is divided in following categories:
(i) Borrowing and other liabilities
(ii) Recovery of loans
(iii) Disinvestment

6. Cont…
Revenue expenditure refers to those expenditures which do not result
in the creation of assets.
Capital expenditure refers to those expenditures which leads to
creation of assets or reduction in liabilities.
Plan expenditure is that public expenditure which is incurred on new
government initiatives. Expenditure on current development and
investment that arise due to plan proposals, included in plan
expenditure.
Non-plan expenditure refers to that expenditure which are not
covered or included in the plan. Expenditure which are made to meet
past commitment are also included in nonplan expenditure. eg.
interest payment, subsidies, defence services, etc.

7. Cont…
The expenditure incurred on economic and social development of the
country is known as developmental expenditure.
The expenditure of non-developmental nature covers such items as
administrative services like defence, police, administration of justice,
etc.
Fiscal/Financial year = 1 April to 31 March(In India).

8. BUDGET DEFICIT:
Occurs when expected receipts fall short of total expenditure of
government.
Budget deficit=Total Expenditure (Revenue + Capital)- Total
Receipts(Revenue + Capital)
Surplus budget : if expenditure < revenue
Deficit budget : if expenditure > revenue
Balanced budget : if expenditure = revenue

9. TYPES OF BUDGET DEFICIT
1. Revenue Deficit =
Revenue Expenditure ( Non-Plan Expenditure on Revenue Account
+ Plan Expenditure on Revenue Account ) - Revenue Receipts (
Tax Revenue, net to Centre + Non-Tax Revenue)
2. Fiscal Deficit =
Total Expenditure – (Revenue Receipts + Recoveries of Loans +
Other Receipts)
3. Primary Deficit =
Fiscal Deficit - Interest Payment

10. OBJECTIVES OF BUDGET
1. Reallocation of resources
2. Equitable distribution of income and wealth
3. Price stability
4. Management of public enterprises

11. BUDGET AT A GLANCE

12. Cont…

13. ANALYSIS OF INDIAN UNION BUDGET
1.AGRICULTURE:
 RS. 22049 crore is decided for this sector for 2013-2014 which
increased to RS. 27049 crore for 2014-2015.
▪ To increase the production to 6% which was 3.6 % in the previous
year.
▪ Continuation of interest subvention scheme for agriculture sector
along with a CreditTarget of Rs 7 lakh crore for FY 2014-15 to
adequately meet the financing needs of farmers and would help
sustain the agricultural growth.

14. 2.FISCAL CONSOLIDATION:
▪ announcement to contain the fiscal deficit at 4.6 % of GDP for 2013-
14, which is lower than 4.8% budgeted for the year.This would help
to channelize resources for investment and help contain inflation
▪ achieved at the cost of a cut in developmental expenditure, which is
crucial for asset creation in the country
CURRENT ACCOUNT DEFICIT:
▪ The CurrentAccount Deficit (CAD) that has threatened to exceed last
year’s CAD of USD 88 billion, is expected to be contained at USD 45
billion
▪ will help stabilising the rupee

15. TAX REFORMS:
 The Finance Minister’s appeal to all political parties to evolve a
consensus to enactment of GST
▪ DirectTaxes Code (DTC) will be puton the website of the Ministry of
Finance for a public discussion
▪ rationalize the current indirect tax regime, eliminate tax cascading
and put the Indian economy on higher growth trajectory

16. 3.MANUFACTURING:
 The share of manufacturing has continued to hover at around 16
percent of GDP for the last two decades
 The government has set a target of taking the share of
manufacturing in GDP to 25 percent by 2022 which will create 100
million jobs within the decade requires the sector to record a growth
of 12-14% per annum

17. ▪ STEPS TAKEN : reduction of excise duty on capital goods and
consumer non-durables from 12% to 10%
▪ reduction in excise duty from 12% to 8% on small cars, two wheelers
and commercial vehicles and from 30% to 24% on SUVs
▪ 8 National Investment and Manufacturing Zones (NIMZ) along Delhi
Mumbai Industrial Corridor (DMIC) have been announced. 9 Projects
had been approved by the DMIC trust

18. ▪ PROMOTING MSME:
▪ The MSME sector is known for its immense contribution for
promoting employment intensive growth in the country
▪ Initial contribution of Rs. 100 crore to the corpus of ‘India Inclusive
Innovation Fund’ under the Ministry of MSME

19. 4.REFORMING FINANCIAL SECTOR:
▪ Key announcements made in the Budget for the Financial Sector
▪ BANKING:
▪ Finance Minister has managed to make some important allocations
for the banking sector.
▪ Given the stressed assets in the banking sector, the Finance
Minister’s allocated Rs 11,300 crore for strengthening the capital
base of public sector banks .

20. Allocation of funds (Rs 200 Cr) for IFCVenture Fund would
provide the much-needed boost to nurture innovation and
entrepreneurship
Liberalizing the framework for Rupee denominated bond
market and the launching of rupee denominated bond by
IFC
Will help in internationalisation of Indian Currency
To enable smoother clearing and settlement for
international investors looking to invest in Indian bonds and
to increase capital inflow
FINANCIAL MARKETS:

21. 5.EDUCATION LOAN:
▪ Rs 2600 crore is provided for education loan.
▪ to provide significant support to students during their non-earning
years.
▪ Nearly 9 lakh students borrowers will benefit to the tune of
approximately Rs 2,600 crore.

22. Completed With help of Dr. Balraj Rao.