Partner With Us NRI

Open Free Demat Account Online with ICICIDIRECT

What is the Budget? Union Budget for Beginners


Everyone requires a budget to take their financial planning forward. It contains an estimation of revenue and expenses during a specified period in the future. A budget can be made for an individual, a group of people, small business firms, large corporate entities, and the Government.

In this article, we will discuss the Union Budget of India, its components, and various other details about it. Let's get started.

What is Union Budget?

Also known as the annual financial statement, the Union Budget of India is the summary of the estimated revenues and expenditure of the Government for the applicable financial year. It keeps the account of the Government's finances for a given fiscal year, i.e., from 1st April to 31st March. The Government's roadmap for fund collection and allocation during a given financial year.

That is similar to the monthly household budgets we prepare for our income and expenses. The Union Budget is the statement of the estimated receipts and expenditure of the Government for that particular year.

Who presents the Union Budget and when?

The Finance Minister of India presents the Union Budget in Parliament on the first day of February every year. For example, the current Finance Minister of India – Nirmala Sitharaman – would be presenting the Union Budget for the financial year 2022-23 on 1st February 2022. The Budget speech would commence at around 11 AM the morning.

Before 2017, the Governments used to present the Union Budget on the last working day of February. The tradition was changed by the then Finance Minister of India, Mr Arun Jaitley. The Railway Budget of India – which was presented separately till 2016 – was also merged with the Union Budget in the same year.

The two components of the Budget

The Union Budget of India is classified into two components – the Revenue Budget and the Capital Budget. The revenue budget includes the revenue receipts and expenses incurred by the Government for day-to-day functioning and subsidies. These revenues could be from taxes and non-taxable sources.

On the other hand, the capital budget includes the capital receipts and payments of the Government. Loans from the public, foreign Governments, and the Reserve Bank of India (RBI) are capital revenues for the Government. The capital expenditure by the Government includes the money spent on buildings, infrastructure, schools, hospitals, etc.

How does the Union Budget impact our economy?

As you know, the Union Budget acts as a blueprint for Government's revenues and expenses during a given financial year. It aims at reducing the fiscal deficit and economic inequality within the country with adequate planning and dedicated policies. Every Government tries to ensure the proper allocation of finances for various welfare activities for the country's development.

The Union Budget identifies various revenue sources for the Government and their structures. For example, income tax, GST, RBI loans, foreign loans, etc. It also provides guidelines for industries and citizens to become a part of India's growth strategy. In a way, the Union Budget helps shape up the economy and the country's economic reforms.

What is an interim budget?

When an entire budget cannot be presented in the Parliament, the Government presents an interim budget. This usually happens when the elections are due and hence, the full budget can be announced only after the formation of the new Government.

An interim budget uually doesn’t offer any fresh proposal on direct or indirect taxes.

To conclude

The presentation of the Union Budget is a crucial annual exercise by the Government. Any changes or proposals made through the Budget not only affect the country's overall economic structure but also impacts the equity markets in the short term.

For common people, it means a lot as it dictates the increase or decrease in the prices of daily commodities which can affect their personal budget.  


ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.

Most Popular

  • 13 May 2022
  • ICICI Securities

The Five-Point Financial Planning Checklist For Your Family

Whether you just got married or planning to have a baby or have dependents, you should have financial plans for every stage in your life to ensure a secured future for your family members. Here are five things you can do financially for your family.   

  • 12 May 2022
  • ICICI Securities

What is a Zero Coupon Bond?

You get fixed returns in the form of interest until maturity when you invest in a bond. Zero-coupon bonds work a little differently. In this article, find out what zero-coupon bonds are, their advantages and whether you should invest in them. 

  • 12 May 2022
  • ICICI Securities

What are Cross Currency Pairs?

The forex market is the largest financial market globally. Currency trading is a lucrative and booming business. While most currencies trading happens in relation to the US Dollar, some don’t. That forms the basis of cross currency pairs. Here’s what you need to know about it. 

  • 12 May 2022
  • ICICI Securities

Investing principles from Benjamin Graham: The Father of Value Investing

Benjamin Graham was a British born economist, professor, and investor who taught at Columbia University. He was also a mentor to some of the most famous investors of the 20th century, including Irving Khan, John Templeton, & Warren Buffett. Buffett called him "the second most influential figure in his life, only after my father". 

  • 12 May 2022
  • ICICI Securities

How to Invest in Nifty 50?

The Nifty 50 is the benchmark index of the National Stock Exchange. It represents the 50 largest companies listed in India. Investing in the Nifty 50 can be a good idea for those looking to make index-linked returns. Here’s how you can invest in the index. 

  • 12 May 2022
  • ICICI Securities

Investment philosophy of Cathie Wood: The most powerful woman on Wall Street

Catherine Duddy Wood, also called Cathie Wood, is an investor who primarily invests in disruptive technologies and is the founder, chief executive officer, and chief investment officer of ARK Investment Management, LLC, an investment management firm mostly active in the United States.

  • 11 May 2022
  • ICICI Securities

How to Use Technology to Improve Your Finances

Technology has made life simpler for everyone. In the realm of personal finance, technology has streamlined many processes—from budgeting to automating your payments. On National Technology Day, let’s look at how technology has transformed our finances. 

  • 11 May 2022
  • ICICI Securities

How to Invest in your Every Goal with Mutual Funds?

Each of us is unique. We have different needs and goals in life. Some of us can ride along swinging markets, while some may need a relatively conservative investment tool. 

  • 11 May 2022
  • ICICI Securities

Four Reasons Why Entrepreneurs should Invest in Equity Mutual Funds

Equity mutual funds provide growth opportunities not just for individual investors but also for entrepreneurs and corporates. They make excellent investments for anyone looking for wealth creation. This article will give you four reasons why businesspeople should consider investing in equity mutual funds.