Union Budget 2023: Your Simplest Guide to Understanding Budget

By Jessica On Jan 31, 2023

Last Updated: January 31, 2023, 11:53 IST

The government’s financial records are kept by the Union Budget for the fiscal year, which runs from 1 April to 31 March (Image: Shutterstock)

Union Budget 2023: Want to know what terms like revenue expenditure, capital expenditure are? Explained here at News18.com

What is the Union Budget?

The Union Budget of a year, commonly known as the annual financial statement, is a declaration of the estimated receipts and expenditures of the government for that specific year, as per Article 112 of the Indian Constitution.
The government’s financial records are kept by the Union Budget for the fiscal year, which runs from 1 April to 31 March. Revenue Budget and Capital Budget are two categories for the Union Budget.

What is the Revenue Budget?

The government’s revenue budget reflects both its revenue inflows and expenditures. Tax income and non-tax revenue are the two types of revenue receipts.
Revenue expenditures are the costs associated with maintaining the government’s operations and providing residents with a range of services. The government runs a revenue deficit if revenue outlays outpace revenue inflows.

And the Capital Budget?

Government capital payments and receipts are included in the capital budget. The majority of the government’s capital receipts come from loans from the public, other governments, and the RBI.
The development of machinery, equipment, buildings, healthcare facilities, educational facilities, etc. is referred to as capital expenditure.
When the government’s entire spending exceeds its total receipts, a fiscal deficit results.

Other Key Terms:

Revenue – Receipt & Expenditure	*Revenue* *Receipt:* The receipts received that the government is unable to recoup It includes money that the government has accrued from both tax- and non-tax-related sources, such as interest and investment dividends. *Revenue* *Expenditure:* Costs incurred by the Union Government that are not related to the production of tangible or monetary assets It covers costs expended for the routine operation of government agencies, grants given to state governments, and interest payments on the Union Government’s debt, among other things.
Capital – Receipt & Expenditure	Capital receipts are payments made to the government that increase liabilities or decrease financial assets. It includes borrowings from commercial banks, the Reserve Bank of India, and other financial organisations. Along with loans from foreign governments and international organisations, it also includes repayment of debts that the Union government has provided. Capital expenditures are expenditures made by the government that lead to the creation of tangible or monetary assets for the Union Government or a reduction in its financial liabilities. It includes money spent on buying shares, infrastructure, equipment, and land. Additionally, it comprises loans made by the Union government to states, union territories, and PSUs.
Corporation Tax	It is the tax on profits of companies
Direct Tax	Taxes that are levied against people and businesses directly Income tax and corporate tax are included.
Indirect Tax	Taxes levied on products and services Service tax, excise tax, and customs duties are included in it.
Non-Tax Revenue	Income for the government not obtained through taxes. Some instances of non-tax income: Intragovernmental assistance: In the United States, federal grants and equalisation payments may be regarded as non-tax revenue to the receiving states; international assistance, etc.
Fiscal Policy	The policy of the government Fiscal policy is the means by which a government adjusts its expenditure levels and tax rates to monitor and influence a country’s economy.
Revenue Deficit	It is the difference between government revenue receipts and additional spending.
Fiscal Deficit & Primary Deficit	It is the gap between the government’s total outlays and its total receipts, excluding borrowing. Primary Deficit = Fiscal Deficit – Interest Payments
Gross Domestic Product (GDP)	The monetary value of all completed products and services produced in a nation over a certain time period

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