What is Budget?

Both the Government and private sector are crucial in a mixed economy like India. The Government requires infrastructural, economic, and welfare activities for maximizing the welfare of the country. There is a need for a vast amount of money to finance these activities. The government also generates revenue from various sources like taxes, for which planning and government policies are necessary. A ‘Budget’ is prepared to manage these receipts and payments. A Budget is a detailed program and policies for the given fiscal year. 

The Government budget is a statement of expected receipts and expected expenditures of the Government (for the coming fiscal year) that reveals the budgetary policy of the Government to achieve the twin objective of growth and stability. The financial/fiscal year is taken from 1st April to 31st March.

According to Article 112 of the Indian Constitution, the Central Government must give an account of estimated receipts and payments to the Parliament. The receipts and payments are presented in the estimated figures, not the actual figures in the budget. 

The Budget unfolds:

1. The financial performance of the Government during the past year.
2. The expected financial performance and Government policies for the coming year.

The financial performance is an explanation of what happened during the past year. The budget’s focus is more on the other part, i.e. Government programs and policies for the upcoming year. Government policies (also known as Fiscal Policies) have two aspects; Revenue and Expenditure. Revenue includes the expected receipts, and expenditure includes the expected payments of the Government.