What is the budget?
Annual Financial Statement is the core of the budget. It is the main budget document. Under article 112 of the constitution, a statement of estimated receipts and expenditure of the Government of India has to be laid before Parliament in respect of every financial year running from 1st April to 31st March. This statement shows the receipts and payments of the government under the three parts in which government accounts are kept: (1) Consolidated Fund (2) Contingency Fund and (3) Public Account.
What is the Consolidated Fund?
All revenues received by government, loans raised by it, and also its receipts from recoveries of loans granted by it, form the consolidated fund. All expenditure of the government is incurred from the consolidated fund and no amount can be withdrawn from the fund without authorisation from Parliament.
What is the Contingency Fund?
As the name suggests, this fund is placed at the disposal of the President to enable the government to meet urgent unforeseen expenditure pending authorisation from Parliament. The corpus of the fund authorised by Parliament is, at present, Rs 50 crore.
What is the Public Account?
Besides the normal receipts and expenditure of the government which relates to the consolidated fund, certain other transactions enter government accounts in respect of which government acts more as a banker, for example, transactions relating to provident funds, small savings collections, other deposits, etc. The money thus received is kept in the public account.
As the money, generally speaking, does not belong to the government and has to be paid back some time or the other to the persons and authorities who deposited it, parliamentary approval for payment from the public account is not required.
What is the revenue budget?
This consists of the revenue receipts of the government (tax revenues and other revenues) and the expenditure met from these revenues. Tax revenues comprise proceeds of taxes and other duties levied by the Union. Other revenues are receipts of the government mainly consisting of interest and dividend on investments made by the government, and fees and receipts for other services rendered by the government. Revenue expenditure is expenditure for the normal running of government departments and various services, interest charges on debt incurred by government, subsidies and so on. Broadly speaking, expenditure which does not result in the creation of assets is treated as revenue expenditure. All grants given to state governments and other parties are also treated as revenue expenditure even though some of the grants may be for creation of assets.
What is the capital budget?
This consists of capital receipts and payments. It also incorporates transactions in the public account. Capital receipts are loans raised by the government from the public which are called market loans, borrowings by the government from the Reserve Bank and other parties through sale of treasury bills, loans received from foreign bodies and governments, and recoveries of loans granted by the central government to state and union territory governments and other parties.
Capital payments consist of capital expenditure on acquisition of assets like land, buildings, machinery, and equipment, as also investments in shares, loans and advances granted by the central government to state and union territory governments, government companies, corporations and other parties.
What are demands for grants?
It is the form in which estimates of expenditure included in the annual financial statement and required to be voted upon in the Lok Sabha are submitted. Generally, one demand for grant is presented in respect of each ministry or department. However, for large ministries and departments, more than one demand is presented.
What is the finance bill?
The proposals of the government for levy of new taxes, modification of the existing tax structure or continuance of the existing tax structure beyond the period approved by Parliament are submitted to Parliament through this bill.
What's the performance budget?
This is the budget of the ministry in terms of functions, programmes and activities, and gives appraisal reports separately in respect of major central sector projects/ programmes estimated to cost Rs 100 crore or more.
What are appropriation bills?
After the demands for grants are voted by the Lok Sabha, Parliament's approval to the withdrawal from the consolidated fund of the amounts so voted and the amount to meet the expenditure charged on the consolidated fund, is sought through the Appropriation Bill.
