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2014

Economy Updates – Mar-2014

Know Your Budget

  • The Constitution of India refers budget as the Annual Financial Statement.
  • In other terms the word “budget” has no where been used in the constitution.
  • The Budget is a statement of estimated receipts and expenditure of the Government of India in a financial year which begins on 1st April and ends on 31st March.

Funds of Government

The Constitution of India provides following three kinds of funds for the central Government.

  1. Consolidated Fund of India: It is a largest fund and includes all direct and indirect tax receipts. It includes all loans raised by the government of India. No money out of this fund can be appropriated without parliament’s approval.
  2. Public Account of India: This fund includes provident fund deposits, savings bank deposits of the ministries, etc.
  3. Contingency Fund of India: It is held by the president of India. The President has power to spend money for Unforeseen expenditure pending authorization of the Parliament. In Budget 2014-15 allocation for contingency fund is Rs. 8000 crore.

Why Budget is introduced?

  1. To take permission of Parliament to take money out of Consolidated Fund of India. (Appropriation Bill)
  2. To give effect to the financial proposals/tax proposals.(Finance Bill)
  3. To put Annual Financial Statement in the Parliament.

Stages In Enactment

  1. Presentation of Budget
  2. General Discussion
  3. Scrutiny by departmental committees
  4. Voting on demand for Grants
  5. Passing of appropriation bill
  6. Passing of finance Bill

Consolidated Fund of India- Receipts

Particulars Budget Estimate 2014-15
(in crore rupees)
Revenue 13,94,899
Capital 46,69,316
Total Receipts 60,64,215

Consolidated Fund of India- Disbursements

Particulars Budget Estimate 2014-15
(in crore rupees)
Revenue 17,77,822
Capital 42,92,640
Total Disbursements 60,70,462

Important:

  1. Deficit budget = When government expenditure exceeds government receipts.
  2. Revenue deficit = Excess of revenue expenditure of the government over its revenue receipts.
  3. Fiscal deficit = Excess of total expenditure over total receipts excluding borrowings.
  4. (Fiscal Deficit = Total budget expenditure – Total budget receipts net of borrowings.)

FYI: Collection from Direct Taxes

Particulars Budget 2014-15
(in crore rupees)
Corporation Tax
(Tax On Companies)
4,51,005
Taxes On Income 3,06,466
Wealth Tax 950
Total Direct Taxes Collection 7,58,421

FYI: Collection from Indirect Taxes

Particulars Budget 2014-15
(in crore rupees)
Customs Duty 2,01,314
Excise Duty 2,00,585
Service Tax 2,15,478
Total Indirect Taxes Collection 6,17,377
Financial Management