What is the Union Budget?
The Union Budget 2024 was announced on the 23rd of July. It’s a big plan that tells us how the government will spend and earn money in the next year. Everyone is talking about it, from news channels to social media.
Important Terms You Need to Know:
1. Expenditure Budget
This part of the budget shows where the government plans to spend money. There are three main areas:
• Capital Expenditure: Money spent on things that will be useful for a long time, like roads and schools.
• Revenue Expenditure: Money spent on regular costs like government salaries.
• Interest Payments: Money paid on loans taken by the government.
The government should spend more money on building things like bridges and roads because this will help us in the future.
2. Revenue Budget
This is about how the government makes money to spend. Mainly, it comes from:
• Taxes: Like the money we pay when we buy things (GST) or earn money (income tax).
• Selling Assets: Sometimes, the government sells part of its companies.
• Borrowing: When insufficient money comes in, the government borrows money.
3. Fiscal Deficit
Sometimes, the government doesn’t have enough money to cover all its plans. The shortfall is called the fiscal deficit. It’s like using a credit card to fill the gap. The fiscal deficit is a percentage of the country’s total economy (GDP).
Even though borrowing money sounds bad, it’s not always harmful. For example, India borrows money at a low interest and can still grow financially. It’s all about balancing and not going overboard.
4. Budgeted Estimates and Revised Estimates
When the budget is made, the government guesses how much it will spend and earn. These guesses are called Budgeted Estimates (BE). Later, based on what actually happens, these numbers might be changed to Revised Estimates (RE).
5. Finance Bill
The budget isn’t just about numbers; it’s also a plan for new government actions. Sometimes, new laws must be made to bring these plans to life. These laws are written in the Finance Bill and must be agreed upon in Parliament.
Why These Terms Matter
Knowing these terms helps us understand what the government plans for our country. It’s like knowing the rules of a game—it makes it easier to follow along and see if they’re doing a good job.
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