Current General Studies Magazine (May 2015)

General Studies - III: Economy Based Article (Brief Description of the Budget Documents)

(a) Annual Financial Statement

Under Article 112 of the Constitution, a statement of estimated receipts and expenditure of the Government of India has to be laid before Parliament in respect of every financial year which runs from 1st April to 31st March. Annual Financial Statement is the main Budget document and is commonly referred to as the Budget Statement.

(b) Demands for Grants

The estimates of expenditure from the Consolidated Fund included in the Budget Statements and required to be voted by the Lok Sabha are submitted in the form of Demands for Grants.Normally a separate demand is required to be presented for each of the major services under the control of a Ministry/Department.Each demand normally includes the total provisions required for a service, that is, provisions on account of revenue expenditure, capital expenditure, grants to States and Union Territories and also loans and advances relating to that service. Estimates expenditure included in the Demands for grants are for gross amounts.

(c) Receipts Budget

Estimates of receipts included in the Annual Financial Statementare further explained and analysed in the Receipts Budget. Trend of revenue receipts and capital receipts over the years and details of ExternalAssistance are also included.

(d) Expenditure Budget Vol. No. 1

Expenditure Budget Vol. No. 1 deals with the revenue and capital disbursements and gives the estimates in respect of Planand Non-Planand explains the variations in the estimates of both.

Expenditure Budget Vol. 1 contains information in separate Statements and Annexures, providing information relating to General Expenditure, Non Plan Expenditure, and Plan Outlay. The Statements relating to Gender Budgeting and Budget provisions for schemes for the Welfare of Children, position on guarantees given by Central Government and outstanding as at the end of March last are also shown in this document.

(e) Expenditure bBudget Vol. 2

To understand the objectives underlying the expenditure proposed in the Demands for Grants, a brief description of the various items of expenditure on major programmes included in the Demands together with the reasons for variation between the budget estimates and revised estimates for the previous year and the budget estimates for the current year are given in this volume.

(f) Finance Bill

The Finance Bill is presented in fulfilment of the requirement of Article 110(1)(a) of the Constitution, detailing the imposition, abolition, remission, alteration or regulation of taxes proposed in the Budget. It is accompanied by a Memorandum explaining the provisions included in it.

(g) Memorandum Explaining the Provisions in the Finance Bill

The purpose of this document is to facilitate understanding of the taxation proposalscontained in the Finance Bill, with the provisions and their implications explained.

(h) Budget at a Glance

This document shows in brief, receipts and disbursements along with broad details of tax/non-tax revenues and other receipts and Plan and Non-Plan expenditure, including allocation of Plan outlays by sectors as well as by Ministries/Departments and details of resources transferred by the Central Government to State and Union Territory Governments.This document also shows the revenue deficit, the gross primary deficit and the gross fiscal deficit of the Central Government.

(i) Highlights of Budget

The key features of the Budget indicates, inter alia, the prominent achievements in various sectors of the economy, new initiatives announced in the Budget,allocation of funds made in important areas, and a summaryof tax proposals.

(j) Status of Implementation of Announcements Made in Finance Ministers Budget Speech

This document indicates the action taken and action in progress on the announcements made in the last budget.The position reflected is updated to first week of February of the reporting year.

(k) Fiscal Responsibility and Budget Management Act Related Documents:

i. Macro-economic Framework Statement;
ii. Medium Term Fiscal Policy Statement;
iii. Fiscal Policy Strategy Statement.

Mandated under Section 2(5), 3(4), 3(3), and 3(2) of the Fiscal Responsibility and Budget Management Act, these statements reflect interalia, the growth prospects of the economy with specific underlying assumptions, the strategic priorities of Government in the fiscal area for the ensuing financial year relating to taxation, expenditure, lending and investments, administered pricing, borrowing and guarantees, and sets out three-year rolling targets for four specific fiscal indicators in relation to GDP at market prices namely (i) Revenue Deficit, (ii) Fiscal Deficit, (iii) Tax to GDP Ratio and (iv) Total out-standing Debt at the end of the year.

(Source- http://finmin.nic.in/)

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