Why Interim Budget 2024 in India : From Digits to Development (Powerful Facts)

Understand Budget and it’s history

The first budget in India was presented 164 years ago. After receiving parliamentary approval, the budget proposals become effective from April 1 and remain in force until March 31 of the following year. In simple terms, the budget is the government’s financial plan for the upcoming fiscal year, detailing the estimated receipts and expenditures. In our New Blog we would understand Why Interim Budget 2024 in India is happening. Know Every facts below.

Government budgets in India are categorized into three types: the operating or current budget, the capital or investment budget, and the cash or cash flow budget. Various forms of taxes, revenue, government receipts, dividends, and interest on loans contribute to the government’s income.

Until 2016, the annual budget was traditionally presented on the last working day of February, but in 2017, then Finance Minister Arun Jaitley changed the presentation date to February 1. The Rail Budget, which used to be presented separately, was merged with the general budget in 2017.

Why Interim Budget 2024 in India-min
Why Interim Budget 2024 in India-min

 

Budgets were initially presented only in English until 1955, after which they were presented in both Hindi and English. The printing of the budget shifted to the Government Press within the Finance Ministry in 1980.

In the history of India, 73 regular budgets, 14 interim budgets, and 4 special or mini budgets have been presented. The tradition of presenting the budget started 164 years ago. The first post-independence budget was presented by the then Finance Minister R.K. Shanmukham Chetty on November 26, 1947.

There have been three instances where the Prime Minister presented the budget instead of the Finance Minister. The longest budget speech was given by Nirmala Sitharaman, lasting 2 hours and 42 minutes for the financial year 2020-21.

Interesting facts about budget speeches include the shortest speech by Finance Minister Heeraben Muljibhai Patel in 1977, and the longest speech delivered by Manmohan Singh in 1991. Morarji Desai holds the record for presenting the budget the most times – 10 times between 1962 and 1969.

As of 2018, Arun Jaitley’s 18,604-word budget speech in 2018 holds the record for the longest budget speech. P. Chidambaram presented the budget 10 times during the United Front government from 1996 to 1998, and then in UPA-1 and UPA-2 governments a total of 9 times. Pranab Mukherjee presented the budget 8 times during the Indira Gandhi government from 1982 to 1984, and Manmohan Singh presented the budget 8 times during the period of 2009 to 2012.

As the elections are anticipated in March-April 2024, an interim budget has been presented for the election year. It’s worth noting that the budget is a crucial aspect of India’s fiscal policy, providing insights into the government’s financial priorities and plans for the upcoming year.

In the vast world of finances and government spending, two terms often pop up – Interim Budget and Union Budget. What do these terms signify, and what sets them apart from each other? In this comprehensive guide, we’ll break down these concepts in simple terms, so everyone, regardless of financial expertise, can understand.

What is a Budget?

Before we delve into the differences, let’s grasp the basic idea of a budget. A budget is like a detailed plan that helps manage money. Governments, just like individuals, need budgets to allocate funds for various activities and expenses.

Types of Budget in India: Why Interim Budget 2024 in India

A Budget is an estimates of expected income and expenses over a specific period. it can be prepared for a month, quarter, or year. The purpose of a budget is to allocate funds effectively, control spending, and ensure financial stability. The Two components of a budget play an important role to define the types of budget in India. First is Receipt and Second is Expenditure.Read More

Types of Budget in India

There are mainly three types of budget, Details are:

Surplus budget= Receitps> Expenditure

Balance Budget= Recepts= Expenditure

Deficit Budget= Expenditure>Receipts

Steps to Creating A Budget :

  1. Calculate your Income: Calculating the total income from all sources such as salary, investment and side jobs.
  2. Tracking Expenses: Tracking the Spending to find where is money is being spent. This helps to finding areas where you can cut back your expenses.
  3. Set Financial Goals: Establish short term and long term financial aims, such as emergency savings, debt repayment or vacation saving. This will help to guide your budgeting decisions.
  4. Allocate Funds: Prioritize your expenses and allocate funds to different categories, such as housing, utilities, transportation, groceries, debt repayment, savings, and entertainment. your income must covers all necessary expenses.
  5. Reduce Unnecessary Expenses: Put the Cap on unnecessary spending such as excess entertainment, dining out.
  6. Monitor and Adjust: Regularly reviewing and tracking budget spending. stay on track with your financial goals.
  7. Save and Plan for the Future: Allocate a portion of your income for savings and investments for future aspects such as retirement, education, marriage etc. or other long-term goals.

The Union Budget: An Overview:

The Union Budget, often referred to as the Annual Financial Statement, is the comprehensive financial plan of the central government for the upcoming fiscal year. It outlines the government’s revenue, expenditure, and financial strategies.

Key Components of the Union Budget:

Revenue: Money the government expects to earn (taxes, duties, etc.)

Expenditure: Planned government spending on various sectors (health, education, defense, etc.)

Fiscal Deficit: The difference between revenue and expenditure

The Interim Budget: Unveiling the Mystery:

What is an Interim Budget?Why Interim Budget 2024 in India

An Interim Budget is a temporary financial plan presented when the government is transitioning. It covers the government’s expenses until a new government, formed post-elections, can present a full-fledged Union Budget.

Key Features of the Interim Budget:

No Major Policy Changes: Interim Budgets typically avoid introducing new policies or making significant changes.

Routine Expenses: It focuses on necessary expenses to keep the government running until a regular budget is presented.

Understanding the Differences:

Now that we’ve introduced the main players let’s explore the distinctions between the Union Budget and the Interim Budget.

Timing:

Union Budget: Presented annually, usually at the beginning of the financial year (April 1 to March 31).

Interim Budget: Presented when there is a transition – during an election year or when a new government is about to take charge.

Scope of Changes:

Union Budget: Allows for major policy changes, new schemes, and adjustments in tax structures.

Interim Budget: Focuses on routine expenses; avoids significant policy changes.

The Nuts and Bolts: Significance of Both

Union Budget: Sets the tone for the government’s financial plans, priorities, and economic strategies.

Interim Budget: Serves as a temporary measure, ensuring essential expenses are met until a new government is ready to present a comprehensive budget.

Decision-Making Power:

Union Budget: A full-fledged budget with the authority to make substantial changes in policies, taxation, and government spending.

Interim Budget: Lacks the same decision-making power; more focused on maintaining financial stability.

Case Studies and Real-World Examples: Historical Context:

Union Budget: Remember landmark decisions, policy changes, and reforms.

Interim Budget: Reflects a more transitional period, addressing immediate financial needs without long-term commitments.

Union Finance Minister Nirmala Sitharaman presented the Interim Budget for the fiscal year 2024, emphasizing the government’s dedication to tax stability and a strategic approach to stimulate economic growth. There were no modifications to the taxation structure, and the Finance Minister refrained from disclosing any information on changes in the prices of goods in her 2024 Union Budget speech.

Nevertheless, she addressed the importance of self-reliance in oil seeds, building upon the initiative introduced in 2022. Sitharaman outlined plans to develop a strategy for achieving self-sufficiency (‘atmanirbharta’) in oilseeds, including mustard, groundnut, sesame, soybean, and sunflower. This comprehensive approach encompasses research for high-yielding varieties, the widespread adoption of modern farming techniques, establishment of market linkages, procurement, value addition, and crop insurance, as highlighted by Sitharaman.

2024-25 Budget: What got cheaper and what costlier? The Times of India facts

 Cheaper: TVs, compressed gas, smartphones, machinery for manufacturing lithium-ion cells for EVs, shrimp feed, lab-grown diamonds.

Costlier: Jewellery, air travel, Cigarettes, bicycyles, imitation, electric chimney, copper scrap, textiles. Know Some Other Facts

Conclusion: Decoding the Budget Puzzle:

In the grand financial puzzle of governance, both the Union Budget and the Interim Budget play crucial roles. While the Union Budget sets the stage for the government’s financial plans, the Interim Budget acts as a bridge during transitions.

Understanding these concepts empowers citizens to comprehend the financial strategies of their government. So, the next time you hear about the Union Budget or the Interim Budget, you can confidently decipher the financial jargon and appreciate the intricacies of government spending. Happy decoding!

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