All you have to know about Union Budget 2017-2018

Union budget

The Union Budget is a statement given by the FM in the country’s parliament about the expenditures to be made by different departments for the next year. In the previous years, Railway budget was announced separately. However, in this year it is included along with the Union budget.

Making of a Budget

A circular will be sent from the budget division of finance ministry to all departments’ union ministers, states, Union territories and other autonomous bodies to prepare their expenditure estimates for the upcoming year.

Once the estimates are received, a meeting will be held with ministers of all departments and Expenditure division of Finance ministry. The economic affairs department and revenue department will be gathering views from farmers, business people and economists to prepare the budget. Tax fixation will be finalized by the FM along with the PM after discussions with the officials.

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Parliament process

  • The Government will plan for a date to announce the budget and will get it approved by the speaker. The president has to finally give a nod to the date of budget.
  • The budget has two parts. One dealing with the economic survey across the country and the other stating the necessary taxations to be done. After the introduction in Loksabha, an annual financial statement will be given to rajya sabha.
  • After this introduction, the house will be adjourned for a short period. During that time, the grants will be analyzed and demand for grants can be made. Any member can try to reduce the allocations using token cut, Economy cut and disapproval of policy cut.
  • After discussion in the houses, the appropriation bill submitted by the government in Lok sabha for voting. Once it is passed in lok sabha it will become a money bill. The bill should be passed also by the rajya sabha. The president will then give his assent to it.
  • All these procedures should be done within seventy five days from the day of budget introduction in the parliament. Once it is accepted by president, the budget process ends.

Key terms used in budget

Direct tax is the tax paid directly by the individual. Indirect tax is the tax paid by the individual for services   and while buying goods. Indirect taxes include excise and custom duties.

Consolidated fund of India includes all the sources of income to the government. The government will be spending money from this account except things which come under contingency fund.

Monetary policies are the policies introduce by RVI to regulate the interest rate, level of money and liquidity level in the country. Fiscal policies are the policies launched by the government to generate income and to control the economy of the nation.

Fiscal deficit indicates the amount of expenditure the government has to do more than its source of income. The source of income does not include the borrowed amount.

Revenue deficit indicated the difference between the revenue expenditure and the receipt received in the current year. Whereas primary deficit is fiscal deficit without interest payments.

Highlights of the budget 2017-18

Highlights ·         Total expenditure is 21.47 lakh crore

·         Cash transactions cannot exceed three lakh.

·         Customs duty on LNG dropped to 2.5%

·         Companies with more than 50 crore turnover have tax rate dropped to 25%

·         New coastal roads for two thousand km

·         4.11 lakh crore for state and UT’s.

·         National Highways allotted sixty four thousand crore

·         Defence expenditure to be 2.74 lakh crore without including pension expenditure

·         4000 crores allotted to SANKALP