The document discusses key aspects of the Indian Union Budget. It defines the budget as an annual financial statement of estimated receipts and expenditures according to the Indian Constitution. It describes how the budget is classified into revenue and capital budgets, with revenue budget covering tax/non-tax revenues and expenditures for services, and capital budget covering receipts from loans and capital expenditures. It also outlines the budget formulation, enactment, execution, and legislative review processes.

4. A budget is a quantitative expression of a
plan for a defined period of time.
ACCORDING TO BASTABLE:
THE BUDGET HAS COME TO MEAN THE
FINANCIAL ARRANGEMENTS OF A
GIVEN PERIOD, WITH THE USUAL
IMPLICATIONS THAT THEY HAVE BEEN
SUBMITTED TO THE LEGISLATURE FOR
APPROVAL

5. Definition: According to Article 112 of the Indian Constitution, the Union Budget of a year, also referred to as
the annual financial statement, is a statement of the estimated receipts and expenditure of the government for
that particular year.
Description: Union Budget keeps the account of the government's finances for the fiscal year that runs from 1st
April to 31st March. Union Budget is classified into Revenue Budget and Capital Budget.
Revenue budget includes the government's revenue receipts and expenditure. There are two kinds of revenue
receipts - tax and non-tax revenue. Revenue expenditure is the expenditure incurred on day to day
functioning of the government and on various services offered to citizens. If revenue expenditure exceeds
revenue receipts, the government incurs a revenue deficit.
Capital Budget includes capital receipts and payments of the government. Loans from public, foreign
governments and RBI form a major part of the government's capital receipts. Capital expenditure is the
expenditure on development of machinery, equipment, building, health facilities, education etc. Fiscal deficit
is incurred when the government's total expenditure exceeds its total revenue.

6. •Budget formulation: the preparation of estimates of expenditure and receipts for
the ensuing financial year;
•Budget enactment: approval of the proposed Budget by the Legislature through
the enactment of Finance Bill and Appropriation Bill;
•Budget execution: enforcement of the provisions in the Finance Act and
Appropriation Act by the government—collection of receipts and making
disbursements for various services as approved by the Legislature;
•Legislative review of budget implementation: audits of government’s financial
operations on behalf of the Legislature.
Process starts August-September
In the Union government, there is a budget division in the department of economic
affairs under the Ministry of Finance. This division starts the process of
formulation of the next financial year’s Union budget in the months of August–
September every year.
To start the process, the budget division issues an annual budget circular around
the last week of August or the first fortnight of September every year. This annual
budget circular contains detailed instructions for the Union government
ministries/departments relating to the form and content of the statement of budget
estimates to be prepared by them.

7. Estimates, revised estimates and actuals
Planning Commission's role
The ministries would provide budget estimates for
plan expenditure for budget estimates for the next
financial year, only after they have discussed their
respective plan schemes with the Central Planning
Commission. The Planning Commission depends
on the finance ministry to first arrive at the size of
the gross budgetary support, which would be
provided in the budget for the next annual plan of
the Union government. In principle, the size of
each annual plan should be derived from the
approved size of the overall Five-Year Plan (12th
Five-Year Plan, 2012-13 to 2016-17, in the present
instance). However, in practice, the size of the gross
budgetary support for an annual plan also depends
on the expected availability of funds with the
finance ministry for the next financial year.

8. Call to reduce deficit
In the past few years, the finance ministry has been
vociferously arguing for reduction of fiscal deficit and
revenue deficit of the Union government, citing the
targets set by the Fiscal Responsibility and Budget
Management Act and its rules. Hence, presently, the
aspirations of the Planning Commission and Union
government ministries with regard to spending face the
legal hurdle of this Act, which has made it mandatory for
the Union government to show the revenue deficit as nil
(total revenue expenditure not exceeding total revenue
receipts by even a single rupee) and the fiscal deficit as
less than 3 per cent of GDP. This means new borrowing
of the government in a financial year cannot exceed 3 per
cent of the country’s GDP for that year.

10. ELEMENTS OF THE BUDGET ARE :
• It is a statement of government receipts and expenditure.
•Budget estimates pertains to fixed period , generally a year
•Expenditure and sources of budget are planned in accordance with the objective of the
government.
•It required to be approved by parliament or assembly or some other authority before its
implementation.
OBJECTIVES OF A UNION BUDGET:
• Economic growth.
•Reduction of poverty and unemployment.
•Reduction of inequalities of income.
•Reallocation of resources.
•Economic stability.
•Financing and management of public enterprises.
TYPES OF BUDGET:
Balanced budget.(estimated govt. receipts = estimated govt expenditures)
•Unbalanced budget(estimated govt. receipts is not equal to estimated govt expenditures)
1. Surplus budget(estimated govt. receipts > estimated govt expenditures)
2. Deficit budget(estimated govt. receipts < estimated govt expenditures)