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Budget — Economics STD 11 Commerce — Question

Gujarat BoardEnglish MediumSTD 11 CommerceEconomicsBudget5 Marks
Question
Explain the form of central government budget.
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Answer

  • Introduction :
  • Representative of the central government i.e. finance minster on regular base present the estimated income and expenditure of the next financial year in the Ink sabha.
  • In India budget is present for the period of $1st$ April to $31st$ March. In general, central government’s budget is declared in the end of February.
  • During March this proposal is discussed in lok sabha and after necessary changes final budget is accepted.
  • This budget is implemented from $1st$ April.
  • In India according to article $– 112$ of the constitution budget is presented.
  • In union budget there are mainly two parts :
$(1)$ Revenue Account
$(2)$ Capital Account.
  • Expenditure of revenue account is divided into two parts :
$A.$ Unplanned Expenditures
$B.$ Planned Expenditure.
  • While revenue income is also divided into two :
$A.$ Tax income
$B.$ Income other than tax.
  • In this budget total income, total Expenditure and different deficits (Revenue, Fiscal, Primary, Budgetary) are shown.
  • Previous year's corrected Budget and next year's estimated Budget are compared and presented.
  • For example:
  • Financial minister Arun Jaitley presenting $2016-17$ Budget at that time changes budget of $2015-16 $ and $2016-17$ expected is presented. Its implementation period is $1st$ April $2016$ to $31st$ March $2017.$
  • Union Budget :
  • Following are the items shown in Central Government’s Budget :
Revenue Account
Income (Credit) Expenditure (Debit)
  1. Tax Income
  1. Unplanned Expenditure
  1. Revenue from Direct Taxes
  2. Revenue from Indirect taxes
 $(1)$ Interest paid during the year. Interest of the borrowings of the previous year $(2)$ Social Services like education, health, public utilizes and administration and general services. $(3)$ Economic services like Agriculture, Industry, Electricity, Transportation, Technology etc. $(4)$ Grant In Aid given to State Government and Union Territory $(5)$ Expenses on defense $(6)$ Subsidies $(7)$ Salaries, pension etc
  1. Income other than tax
 $B.$ Planned Expenditure
  1. Income from the interest out of the landings given by Government.
  2. Income from profit and dividend from Public sector Unit.
  3. Fees and fine income from public services
  4. Assistance received from abroad
  1. Planned expenditure mention in the revenue expenditure account according to Centre’s Plans. (grants and assistance given to states)
  2. Planned expenditure behind Agriculture, Industries, Irrigation, Energy, Production, Transportation Information and Technology etc.
Income (Credit) Expenditure (Debit)
  1. Recovery of loan
  2. Borrowings
  3. Other capital income like those from disinvestment, small savings schemes etc.
 $(1)$ Repayment of loans $(2)$ Expenditure done on landings. $(3)$ capital expense on society and economic sector. $(4)$ Capital Expenditure incurred in Defense Sector.

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