Interim Budget On Feb 1; Here's All You Need To Know
Union finance minister Nirmala Sitharaman is all set to become only the second in the history of the nation to present six consecutive budgets. Sitharaman will present the Union Budget in the Parliament on February 1, 2024. Ahead of the upcoming 2024 Lok Sabha general elections, this budget will only serve on an interim basis, lest a change in government is on the cards.
A full-fledged Budget will be presented following the elections and the forming of a government at the Centre. While a full-year Budget helps to chart a roadmap, to understand the course of economic growth of a nation for a fiscal year, the Interim Budget will only present the financial details for the transitional period.
If you are scratching your heads, wondering what are the intricacies involved with an Interim Budget, here are some of the frequently asked questions in this regard:
When will the Union Budget be presented?
The Union Budget is presented on February 1 every year, with the former finance minister, late Arun Jaitley starting the tradition back in 2017. Prior to that, the annual budget was presented on the last day of February.
What will be the key areas of focus for Budget 2024?
An interim budget usually goes on the lines of populist spending, coming during an election year. However, a recent Reuters report stated that Prime Minister Narendra Modi is likely to do away with the trend this year and focus on infrastructure while keeping the economy steady and narrowing the budget gap.
The report cited Citigroup economist Samiran Chakraborty in saying that the government is likely to aim for a balance between pre-election political messaging, fiscal consolidation needs and a consistent focus on capex.
The Prime Minister remains in pole position to secure another term in the upcoming polls, which means the pressure to take populist steps is minimal, said Abhishek Gupta, according to a Bloomberg Economics report. The fiscal plan is likely to signal a continuity of policy, he said.
Where to get information about the Budget?
The Union finance minister’s Budget presentation with her speech in the Parliament will be telecast live. Pratidin Time will bring all the latest updates on the day. Feel free to check back for all information you may require.
Meanwhile, the finance ministry has a dedicated website for the Budget which also contains links to previous Budget speeches and the announcements by the government at the end of financial years, including the statements of accounts.
When was the last Interim Budget presented?
The last interim budget was presented in 2019 by the then Finance Minister Piyush Goyal, similar to the one we are about to witness this year. He was handed the additional duties of the Finance Ministry due to the health issues faced by Arun Jaitley.
Goyal announced several crucial changes in that year’s interim budget, which was presented on February 1, 2019. They were the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme, creation of the Department of Fisheries, Rashtriya Gokul Mission, the allocation of Rs 1.58 lakh crore for the Railways and Rs 19,000 crore for the construction of rural roads under the Gram Sadak Yojana. Goyal also announced that individual taxpayers having a taxable income annually up to Rs 5 lakhs will not have to pay any income tax.
What about the Economic Survey?
It is one of the most integral parts of the entire Budget, however, this year the government will not present the economic survey.
The Centre has come up with a report on India’s journey from the past 10 years. The report has been titled ‘Indian Economy: A Review’, according to Chief Economic Advisor (CEA) V Anantha Nageswaran.
The first economic survey was presented in 1950-51. The document was put forward along with the Union Budget till 1964. Later on, it was presented separately before the announcement of the Budget.
Key terms associated with the Budget?
If you are unable to wrap your head around some complex terminologies associated with the Budget, here’s a glance at them:
Annual Financial Statement: This is a report submitted to the Parliament annually as a component of the Budget procedure, as mandated by Article 112 of the Indian Constitution. Typically, the report is segmented into the Consolidated Fund, Contingency Fund, and Public Account.
Economic Survey: This is the report released by the government one day prior to the Union Budget. The Economic Survey gives a summary of the economic performance and important macroeconomic measures.
Tax Regime: This outlines the tax brackets and percentages for employees and other individuals earning income. In 2020, the government implemented an alternative simplified income tax system called the New Tax Regime. This new system lowered the tax percentages for various income brackets. In the recent Union Budget, Ms. Sitharaman made the New Tax Regime the standard choice.
Money Bill: A Money Bill is a particular kind of Finance Bill that addresses tax, revenue, and government spending issues. For a bill to be classified as a Money Bill, it must cover the specific topics outlined in Article 110 (1) (a) to (g) of the Indian Constitution. Additionally, a Money Bill can only be introduced in the Lok Sabha.
Finance Bill: The Finance Bill is a crucial component of the Budget as it provides comprehensive information on government revenue, spending, and budget allocations for a specific financial year. It encompasses details regarding new taxes and modifications to current tax frameworks. This bill is presented annually and, upon approval, transforms into the Finance Act. The preparation of the Finance Bill aligns with the guidelines outlined in Article 117 of the Indian Constitution.
Fiscal Deficit: This refers to the variance between the government's overall spending and the income it receives in a fiscal year. To narrow this difference, the government implements various strategies, such as obtaining funds from the Reserve Bank of India (RBI).
Gross Domestic Product (GDP): One of the most frequently utilized economic measures, GDP is a crucial gauge of a nation's economic performance. It represents the total worth of goods and services produced within a country over a specific timeframe.
Budget Estimates: In relation to the Union Budget, the Budget estimates indicate the projected funds assigned to different ministries, departments, sectors, and schemes of the central government. It establishes the expenses that will be accrued over a defined period and outlines the methods and locations for the allocation of funds.
Capital Expenditure: Capital expenditure refers to the funds that the government plans to assign for different projects aimed at development, as well as for acquiring or depreciating machinery and assets associated with economic growth.
