InvestorQ : What does the budget typically cover?
sanjana Tulsiani made post

What does the budget typically cover?

Nikita Damle answered.
1 year ago
The Union Budget is one of the most anticipated announcements by the Finance Minister. This Budget essentially reviews the expenditure and income for the entire financial year (April 01st to March 31st) of the Indian economy. It is also time they declare financial reforms. The budget consists of the following parts:

  • The first part of the Budget is the Annual Financial Statement (AFS). It outlines the estimated receipts and expenditures of the government for the coming fiscal year.
  • The next part talks about 3 key accounts: the Consolidated Fund of India (CFI), the Contingency Fund of India, and the Public Account which includes trust funds like PF collections, small savings, etc.
  • The next critical segment covers the Demand for Grant which covers all withdrawals from the Consolidated Fund of India.
  • Then follows the Finance Bill which key changes pertaining to direct and indirect taxes. This segment has major implications for investors, corporates, and stock markets.
  • The next vital segment covers the Fiscal Responsibility and Budget Management (FRBM) Act where the finance minister has to clearly lay out fiscal deficit targets for next year, review the progress of the fiscal deficit target in the current year and inform the house of any discrepancy with appropriate justifications.
  • Following the above, the Expenditure Budget outlines allocations for various schemes and programs.
  • Then, the Receipts Budget estimates inflows from direct tax, indirect tax, disinvestments, etc.
  • After that, the outcome budget evaluates the deliverables compared to the estimates.
Once the Budget announcement has begun and is being presented, you can take a look at the “Budget at a Glance” to understand the summary of the entire presentation.