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Definition of Union Budget of India
In simple terms, The annual financial statement of a India’s central government is sometimes referred to as the “Union Budget of India”. It is an in-depth report that represents the government’s economic goals, priorities, and strategies. It also contains the government’s revenue and expenditure plans for the next financial year. It is presented by the Finance Minister of India in the Parliament on Feb 1 every year. However, since 2024 is an election year for India, therefore it is an interim budget that simply means, this budget will be in force for short term, typically for 3 to 4 months until the new government elected.
Who prepares the union budget?
In India, The Ministry of Finance is responsible for preparing the “Union Budget of India” under the guidance and supervision of the Finance Minister of India who is Nirmala Sitharaman. There are other stakeholders also who provide their inputs in preparing the Budget. Some of which are Budget Division, NITI Aayog, Central Ministries and departments, Parliament, Economic Advisory Council and other consulting parties.Â
The Ministry of Finance is responsible for managing all aspects of the nation’s finances and economy, including financial regulation, taxation, spending control, and monetary policy. It’s a very critical task for the government to prepare a good Budget as it needs to maintain the balance of growth of the country with the burden of taxes on middle class of the country.Â
How it impact?
The Union Budget of India has a direct impact on each class of society. It impacts day to day life of all the Indians across all the communities. Some of the impacts that can be seen directly are:
1. Personal Finance and Income Taxation
The budget’s announcements about changes to income tax rates, exemptions, deductions, and tax slabs have an immediate effect on people’s ability to spend their money. Budgetary decisions, savings habits, and spending patterns can all be impacted by tax breaks, investment incentives, and relief measures.
2. Living Expenses and Inflation:
Personal consumption prices are impacted by budgetary policies related to indirect taxes, excise, customs, and subsidy duties. Household price inflation and the cost of living are impacted by changes in the prices of food, fuel, housing, and healthcare.
3. Employment and the Generation of Jobs:
Investments in manufacturing, agriculture, MSMEs (Micro, Small, and Medium Enterprises), infrastructure development, and skill development initiatives support the creation of jobs, chances for livelihood, and personal financial independence. Budgetary measures that encourage innovation, entrepreneurship, and industrial expansion help create jobs in a variety of industries.
4. Banking Services and Financial Inclusion:
Individuals, especially those in underprivileged areas and marginalized populations, benefit from budget efforts focused at increasing financial inclusion, expanding banking services, improving credit access, and developing digital payment infrastructure. People have a better ability to handle their money and make investments in the future when they have greater access to banking, insurance, and financial products.
5. Education and the Development of Skills:
Financial allotments for education, career training, skill development, and higher education affect people’s access to high-quality education, their ability to learn, and their chances of finding work. Students, professionals, and learners of all ages gain from investments in teacher training, educational infrastructure, scholarships, and digital learning programs.
Conclusion
Overall, the Indian Union Budget is an in-depth report that outlines the government’s budgetary commitments, policy priorities, and economic strategy with the goal of advancing social development, inclusive growth, and economic prosperity. One can say it is an economic framework for India’s growth and prosperity.