DO YOU KNOW ? : A KEY TO BUDGET DOCUMENT
Apart from the Finance Minister's
speech, the Budget also comprises some other documents that are placed before
the Parliament. Following is a key to some of these documents, as also to some
important terms used therein.
What are the main Budget
Documents placed before the Parliament?
The main budget documents
consist of the Annual Financial Statement, Demand for Grants, Appropriation
Bill, Finance Bill, Macro Economic Framework for the relevant year, Fiscal
Policy Strategy Statement and Medium Term Fiscal Policy Statement. The first
four documents are mandated by the Constitution and the latter three are
placed under provisions of the FRBM Act 2003. Besides these, there are some
explanatory documents also like Expenditure Budget, Receipts Budget, Budget
What is the Annual Financial
This shows the estimated
disbursement and receipts of the government of India for the financial year
in question, in relation to the estimates for the current year and
expenditure for the previous year. The revenue and disbursements are shown
under three heads Consolidated Fund ( Includes all revenue received by
government, loans raised and recoveries from loans. All Government
expenditure is met from this fund), Contingency Fund (A Rs 500 crore
Emergency Fund for unforeseen expenditure, at the disposal of the President)
and Public Account (Money held by government in Trust, example Provident
Fund.). Expenditure from the former two requires authorization from the
Parliament. The Annual Financial Statement also shows separately, the
Revenue Budget (Statement of Revenue receipts from taxes and other revenues,
and expenditure made from these) and Capital Budget (Statement of Capital
receipt from liquidating assets ego selling shares in a public sector
company, raising loans from the public, borrowings from RBI and other
parties through sale of treasury bills, and Capital expenditure made to
What are Demand for Grants?
The expenditure estimates for
different ministries are placed for voting before the Lok Sabha in the form
of Demand for Grants. There are a total of l05 Demands for Grant in the 20 1
0-11 budget. Each demand gives a total of voted expenditure ( expenditure
that requires to be voted by parliament) and charged expenditure
(expenditure that is charged directly to the Consolidated Fund and does not
require to be voted by Lok Sabha eg emoluments of the President) The
document also shows a break up of expenditure under Plan Head (Budget
support to the Central Plan. It also comprises the amount the Centre sets
aside for plans of states and Union Territories.) and Non Plan Heads,( All
bills the government has to pay, like interest payments, subsidies,
salaries, defenses and pension) Under each head Revenue and Capital
expenditure are also shown separately.
What are Appropriation Bills?
Parliament's approval for
withdrawal of money from the Consolidated Fund to 11,cet the expenditure as
voted under Demands for Grants, as also expenditure charged on the
Consolidated Fund, is sought through the Appropriation Bill.
What is Finance Bills?
What is the Macro Economic
This statement contains an
assessment of the growth prospects of the economy. These include assessment
of GDP growth rate, fiscal balance of the government, and external sector
balance of the economy.
What is the Fiscal Policy
This statement outlines
government priority in the fiscal area relating to taxation, expenditure,
lending and investment, administered pricing, borrowing and guarantees. It
explains how the policies are in consonance with sound fiscal management
What is Medium Term Fiscal
This statement lays out three
year rolling target for four specific fiscal indicators in relation to GDP
at market prices. These are revenue deficit, fiscal deficit, Tax to GDP
ratio and total outstanding debt at the end of the year.
The above three Statements are
placed before the Parliament as per the provisions of Fiscal Responsibility
and Budget Management Act 2003. (FRBM 2003)
What is the FRBM Act?
A$ per the Fiscal
Responsibility and Budget Management Act, revenue deficit was to be
eliminated by 2008-09 , which means that revenue expenditure of the
government was to be met entirely from its revenue receipts. Borrowing was
to be done to meet capital expenditure - that is, repayment of loans,
lending and fresh investment. The Act also mandates a 3% limit on the fiscal
deficit after 2008-09
What is Expenditure Budget?
This document gives the details
of revenue and capital disbursement of various ministries and departments,
with estimates for each under Plan and Non Plan. It analyses various kinds
of expenditures. The second volume of this document It also gives statements
of the Plan grants and loans released by the government to state/ district
level autonomous bodies under central or centrally sponsored schemes; gender
budgeting and schemes for development of SC-ST
What is Receipt Budget?
This document contains an
analysis of the estimated receipts of the government. It also provides the
arrear of tax and non tax revenue as mandated under FRBM Act. Trends of
receipt and expenditure, deficit indicators, National Small Savings Fund
statement, statement of liabilities, guarantees given by the government,
statement of assets and details of external assistance are also included in
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