What is the Annual Union Budget ?

 

        On 1st January, Indian Minister of Finance and Corporate Affairs of India, Nirmala Sitharaman told the annual budget for the year 2021-2022. But do you know what this budget really is? Today we will see about this. 

The budget is the total estimated money that will be spent in the financial year. It is the annual financial statement of the expenditure and estimated receipts of the government for that particular year. The budget keeps the account of one financial year of government from 1st April to 31st March of the next year. The budget is classified into two different Budgets. The first one is Revenue Budget. It is the government's income from different sectors. The second one is Capital Budget. It includes all the expenditure or payments of government which they have to give to different sectors. 

        

        Let’s see how India spends money, i.e Capital Budget of India. If we consider of Every 100 Rupees, India spends 5 Rupees on Pensions, 20 Rupees on Interest Payments, 16 Rupees on States’ share Of Taxes and Duties, 13 Rupees on Central sector Schemes, 8 Rupees on Defence, 9 Rupees on Subsidies, 9 Rupees on Centrally Sponsored Schemes, 10 Rupees on Finance Commission and Other Transfers and 10 Rupees on Other Expenditure. 

We have seen how India Spends money but we should also know that India earns money, i.e Revenue Budget of India. Out of 100 Rupees, India earns 3 rupees from Customs, 36 Rupees from Borrowings and Other Liabilities, 15 Rupees from GST, 14 Rupees from Income Tax, 13 Rupees from Corporation Tax, 8 Rupees from Union excise duties, 6 Rupees from Non-Tax Revenue, and 5 Rupees from Non-Debt Capital Receipts. 

    

        Let’s Check Top 10 Important Points that we should know from the Annual Union Budget of the year 2021-2022.

            1. Expenditure Budget: Finance Minister Nirmala Sitharaman has secured a funding position for 2021-22. Compared to the CAPEX of Rs 4.12 lakh crore in the Revised Estimate (RE) for 2020-21, it increased by 34.46 percent to Rs 5.54 lakh crore by 2021-22.

            2. Transformation Signal: Two state-owned banks and a state-owned insurance company will be followed up to withdraw funds. FDI insurance will increase to 74% from 49% now. LIC IPO.

            3. Bad Bank - A Good Idea: After almost six years, the government finally decided to set up a restructuring company that would take out bad bank loans, giving them the opportunity to finance economic recovery.

            4. Regenerative Financial Institutions (DFI): The idea was dead with previous DFIs including IDBI and ICICI turned into banks. Providing credit for long-term pregnancy projects, the new DFI with a capital of Rs 20,000 crore. It will be legally supported but will be managed professionally. Loan portfolio of Rs 5 lakh crore over three years.

            5. Health Getting Right: In the year when the world was devastated by the Covid-19 epidemic, FM gave health attention to health. Health distribution has increased by 137% to Rs 2,23,846 crore in 2021-22 compared to Rs 94,452 crore in 2020-21. She donated $ 35,000 to the Covid-19 clinic and promised to provide additional funding if needed.

            6. No Populism, But Focus on Growth: Although it has been a difficult year for aam admi, FM has avoided offering any tax deductions. No increase in standard hauling, no increase in tax slabs.

            7. Growth Vs Prudence - Growth Towards Financial Deficit estimated at 6.8% of GDP for 2021-22; estimated to touch 9.5% by 2020-21. It will be reduced to 4.5 percent of GDP by 2025-26.

            8. Election Eye - Unexpected: Four constituencies have received major road projects: Tamil Nadu (3,500 km - Rs 1.03 lakh crore), Kerala (1,100 km - Rs 65,000 crore), West Bengal (675 km - Rs 25,000 crore) and -Assam (1,300 km - Rs 34,000 crore).

            9. Strategic Investment - Also, Political / Management Strikes Needed: NITI Aayog has requested shortlisting of non-core PSUs for strategic sales. After a bad show in 2020-21, the government has estimated investment receipts at Rs 1,75,000 crore.

            10. Asset Monetization - Will It Accelerate Speed: This is an ongoing process, where the government has done little to boost self-confidence. National Pipeline for NHAI, PGCIL, Railways, airports, warehouses, stadiums.

        This is All About the Budget. To know more About any Topic you can Email us Or Fill in the contact form.