Budget Basics
Economics · बजट की मूल बातें
📋Quick Overview
The Union Budget is the annual financial statement of the Government of India, presented under Article 112 of the Constitution. It is presented by the Finance Minister on 1 February each year (since 2017; earlier it was presented on the last working day of February). The Budget is divided into Revenue Budget and Capital Budget. Key deficit concepts include Fiscal Deficit, Revenue Deficit, and Primary Deficit. The FRBM Act 2003 mandates fiscal discipline.
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Budget is called 'Annual Financial Statement' in Article 112. Railway Budget was merged with Union Budget from 2017.
📖Revenue vs Capital — Receipts & Expenditure
📖Deficit Concepts & Formulas
| Deficit | Formula | Significance |
|---|---|---|
| Revenue Deficit | Revenue Expenditure - Revenue Receipts | Shows how much govt is borrowing for day-to-day expenses. Should be zero ideally. |
| Fiscal Deficit | Total Expenditure - Total Receipts (excluding borrowings) | Most important deficit. Shows total borrowing need. FRBM target: 3% of GDP |
| Primary Deficit | Fiscal Deficit - Interest Payments | Shows borrowing need excluding past debt obligations |
| Effective Revenue Deficit | Revenue Deficit - Grants for Capital Asset Creation | Introduced in Budget 2012-13. More accurate revenue deficit measure |
📝Three Funds of India & Key Budget Terms
| Fund/Term | Article | Key Detail |
|---|---|---|
| Consolidated Fund of India | Art 266(1) | ALL govt revenues, loans, repayments deposited here. Money can ONLY be withdrawn with Parliament's approval |
| Contingency Fund of India | Art 267 | Emergency fund at disposal of President. Rs 500 crore. Used for unforeseen expenses without waiting for Parliament |
| Public Account of India | Art 266(2) | Money held in trust by govt (PF, small savings, deposits). Govt acts as banker, not owner |
| Vote on Account | Art 116 | Advance grant for 2 months to run govt when Budget is not yet passed (usually in election year) |
| FRBM Act | 2003 | Fiscal Responsibility and Budget Management Act. Targets: Fiscal deficit 3% of GDP, eliminate revenue deficit |
| Guillotine | — | When all pending demands are put to vote without discussion due to time constraint |