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How to explain the Budget to the youth

ICICI Securities 28 Jan 2022 0 COMMENT

Introduction

The Finance Minister presents the Union Budget in the Lok Sabha every year. The Budget speech gives details of revenue and expenditure. Thus, it serves as a roadmap for fund allocation and collection for various activities and projects.

On the day of the Union Budget, the general public comes across many terms they have not heard before. For example, capital gains tax, fiscal deficit, divestment, recapitalization, etc. Generally, the budget speech covers the key points.

To add to this, the sheer amount of data and detail available across various sub-documents makes understanding the complex and complicated structure of the Budget a challenge. Most people, especially the youth, are interested in understanding the budget and want to know its impact on the economy and their budget.

So, here is a quick guide on how you can explain the Budget to the youth. Within a few hours of the Finance Minister's speech, each of these documents is available on www.indiabudget.gov.in.

Budget speech

Despite being a small part of the budget documents, the budget speech is the most important. It contains two parts. The first part shares the finance minister's expectations and amendments for the financial year.

The finance minister announces various planned policies and measures for different sectors in the budget speech. These sectors include education, health, agriculture, capital markets, infrastructure, and more. The FM also shares some of the budgeted targets, such as the fiscal deficit, the government's borrowing from bond markets, and others.

The second part of the Budget covers announcements regarding direct and indirect tax. This section does not include GST since that tax comes under the purview of the GST council. In this part, statements relating to changes in corporate tax, custom and tax duties, income tax slabs, and capital gains tax are made.

The annexure follows the second part. It briefly carries the breakdown of the tax announcements and the budgeted expenditure on different programs, ministries, and schemes.

Budget at a glance

This sub-document is taken as an introductory book with the main budgeted targets. It contains data for capital expenditure, administrative expenditure, tax revenue, and the government's non-tax revenue. Moreover, it shares the fiscal deficit target and the nominal gross domestic product growth target for the upcoming financial year.

Revenue and expenditure

In these documents, details about the various heads of expenditure and sources of revenue are shared. The Revenue Budget categorizes expectations from GST, corporate tax, excise duty, income tax, etc., and non-tax sources such as telecom, privatization, disinvestment, aviation, and other revenues.

When it comes to the Expenditure Budget, it breaks down the size of the Budget as per Ministry. It contains details about where the central government is spending. These include primary education, defence acquisitions, healthcare, PM Kisan Yojana, MGNREGA, etc. 

Finance Bill

The Finance Minister's speech kickstarts the lengthy process. Since it is a Money Bill, both the Lok Sabha and the Rajya Sabha need to pass it. The finance minister responds to all queries and debates in both houses. After that, the Finance Bill is passed, putting the Budget into law. The Finance Bill provides legal backing to the Budget.

Summing up

The Budget is a blueprint of the government's spending and revenue collection. It lays down various policies and schemes. These policies aim on maximizing welfare and facilitating the proper allocation of resources through effective governance. Additionally, the document and its data focus on reducing economic inequality. This is done by controlling prices and increasing balanced development.

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