(Current Affairs) DO YOU KNOW ? : A KEY TO BUDGET DOCUMENT
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 highlights etc
What is the Annual Financial Statement?
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 create assets).
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?
This Bill places details of the government's proposals for new taxation or change in existing tax structure, before the Parliament for its approval. It is accompanied by a Memorandum explaining its provisions.
What is the Macro Economic Framework Statement?
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 Strategy Statement?
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 principles.
What is Medium Term Fiscal Policy Statement?
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 this document.
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