Broader Aspect of the Union Budget

The Government’s annual budget is always a much awaited report for the common man, the entrepreneurs andthe politicians alike. Household budget, industrial productivity, business, even the future of the political parties are affected by the budget. For us, the common citizens, the budget mostly means therise or fall of prices of goods & services and the tax rise or benefits. The purpose of this annual budget is much broader.
The budget deals with Public Finance. It is part of the Government’s Fiscal Policy. Fiscal meaning-dealing with public treasury. The broad objectives of Fiscal Policy are-
o Rapid economic growth
o Reducing economic inequalities
o Increasing employment
o Raising Productivity in all sectors of the economy.
When preparing the budget these broad targets have to be considered. The Government reviews the various sources of income it currently has and how this income can be raised. The income of the government is utilized in various social welfare projects undertaken to raise the standard of living of the nation.These are the expenditures of the Government. The balance between Govt. expenditure and revenue/income generated through taxes has to be achieved in such a way that the sacrifice made by the taxpayers is compensated by the facilities generated by the govt. expenditure in the form of better infrastructure, like roads, electricity, and means of transport etc., i.e. Maximum Social Advantage/benefit.
Through the budget the national expenditure is allocated to different states and different sectors of society and economy. The major components of the Union Budget are -Revenue receipts & expenditure, capital receipts & expenditure and disbursements.

Revenue Receipts of the government-
Tax is the main source of Government revenue. Corporation tax, Income tax, Customs and Union Excise Duties are govt. revenues. Tax is also a means to remove economic inequalities. So the govt. has to strike a balance between widening the tax net and, at the same time ensure that it does not harm production or cause undue price escalation.
Non-tax revenue of the Govt. comes from Interest Receipts, Dividends & Profits and Economy services.
Capital Receipts of the Govt.-
Capital receipts of the Govt. arise from market borrowings, external assistance, recovery of loans, savings & special deposits and provident funds.
Disbursements-
The major disbursement allocation heads of the Govt. are- Payment of interest, defense, subsidies, grants to states, loans & advances, general services, social services and economic services.

Maximum Social Welfare

India being a developing nation, we mostly have deficit budget. As individuals we decide our expenditure according to our income. It is the other way round for the Govt. as it’s prime duty is ‘maximum social welfare’. So the Govt. has to generate income to meet the expenditures. Expenditure on social sectors like health, education, housing etc., infrastructure development, various schemes for rural and agriculture development, poverty alleviation, employment generation, relief funds, all are important expenditures of the govt. Measures like subsidies and various sops and tax holidays for the industries & entrepreneurs help encourage production and exports. All these are essential for achieving a high growth rate.
Deficit budget causes inflation, which in turn has to be controlled through monetary measures. Therefore efforts have to be made so as not to allow the fiscal deficit to cross a certain manageable limit. Besides this, whatever allocations, provisions are made in the annual budget, from time to time it requires changes/corrections, depending on the changing/fluctuating national and global economic scenario.
Budget is thus a tight rope walk. It’s main objective is a higher sustainable economic growth of the country, while taking into account the interests of the common man and also the overall growth of the country.