What is Union Budget?

Article 112 of the Indian Constitution mandates the presentation of the Union Budget to Parliament before the commencement of each fiscal year. For the upcoming fiscal year, which begins on April 1 and concludes on March 31 of the subsequent year, the Union Budget is anticipated to incorporate measures to address the rising inflationary pressures.

Budget Classification

The Union Budget provides a comprehensive overview of the government’s estimated payables and receivables for the fiscal year. It is divided into two main sections: capital and revenue budgets.

Capital Budget

The capital budget deals with the government's spending and income related to long-term investments. Capital receipts include money borrowed from the public or the Reserve Bank of India (RBI). In contrast, capital payments cover costs for things like health services, equipment development and maintenance, and educational facilities. 

Revenue Budget

A revenue budget is a financial plan that outlines the expected income a company or government will receive over a specific period. It includes sources of revenue like sales, taxes, or investments. The goal is to estimate how much money will come in to cover expenses. 

Importance of the India Union Budget

The main goal of the India Union Budget is to promote fast and balanced economic growth in the country, while also ensuring social justice and equality. Let’s look into the importance of Union Budget in India. The following are the primary objectives that demonstrate the importance of the union budget of India.
 

• Optimal Resource Allocation: Ensures resources are used effectively for public welfare.
   
• Reducing Unemployment and Poverty: Aims to eliminate poverty and create job opportunities.
   
• Reducing Wealth and Income Inequality: Balances income distribution through subsidies and taxes.
   
• Economic Stability: Controls inflation and deflation, maintaining price stability.
   
• Tax Structure Changes: Introduces modifications to direct and indirect taxes.
   

Key Budget Terms & Concepts

Understanding key terms and concepts is crucial:

Fiscal Deficit: The gap between total expenditure and revenue (excluding borrowing).

Revenue Deficit: Difference between revenue expenditure and revenue receipts.

Primary Deficit: Fiscal deficit minus interest payments.

Capital Expenditure: Spending on acquiring assets.

Revenue Expenditure: Day-to-day government spending. 

Objective of Budget:  Balanced Growth
 

• The Union Budget focuses on boosting economic growth while ensuring fairness and social justice for everyone.
   
• It aims to reduce income inequality, lower unemployment, and make sure resources are used effectively.
   
• The fiscal deficit shows how much the government needs to borrow when it spends more than it earns. The government tries to balance its income and spending to avoid a large deficit.
   
• To balance the budget, the government can raise taxes, promote economic growth, or cut expenses.
   
• There are two main types of taxes: direct taxes, like income tax, which are paid directly by people, and indirect taxes, like GST, which are paid by consumers through suppliers or manufacturers.

 Conclusion
Understanding the Union Budget of India is essential for comprehending the nation's financial roadmap, fiscal policies, and economic priorities. Additionally, with the dynamic nature of financial markets, having a stock market app becomes increasingly important for investors to track market reactions to the budget, analyze stock performance, and make informed decisions based on the economic shifts outlined in the budget.