Budget in simple words is a description of a financial plan which quantitatively expresses estimation of the revenue and expenses over a specified future period of time. Budgets can be prepared by an individual or a group and it serves as one of the most important administrative tools especially when larger groups like a company or a nation come into the picture.
Derived from an old French word, ‘bougette’ meaning purse, budget is an important concept in Microeconomics.
A budget serves several purposes as follows:
- Provides a forecast of revenues and expenditures thus constructing a model of how a business might perform financially under observation of certain strategies.
- Enables the actual financial operation to be measured against the forecast in the long run.
- Helps to control the use of resources.
Government budgets refer to a summary or a plan of the intended expenditures and revenues to be collected by that government. The Union Budget of India, also referred to as the Annual Financial Statement in Article 112 of the Indian Constitution is the annual budget of the Republic of India.
For the financial year 2016-17, the Union Budget was presented by Finance Minister, Arun Jaitley on 29 February, 2016. Apart from the Union Budget, India also has a separate place for the estimates with respect to the Indian Railways. The Railway Budget is presented by the Railway Minister.
The major features of the Union Budget 2016-17 are as follows:
- Allocation for Agriculture and Farmers’ Welfare
Sum of Rs, 35984 crore (5408.891 Million USD)
Aim: 28.5 Lakh hectares to be brought under irrigation
- Allocation for Rural Sector
Sum of Rs. 87765 (13192. 289 Million USD)
2.87 lakh crore to be given as Grant-In-Aid to Gram Panchayats and Municipalities as per the recommendations of the 14th Finance Commission.
- MNREGA – Sum of Rs. 38500 crore (5787.081 Million USD)
- 100% electrification of villagesby 1st May 2018.
- Allocation for social sectors including Education and Health care – 151581 crore (22784.713 Million USD
- Initial cost of providing LPG connections to BPL families.
2000 crore (300.628 Million USD
- 62 New Navodaya Vidyalayas to be opened
- Allocation for Skill Development
Sum of Rs. 1804 crore (271.166 Million USD)
- 1500 Multi Skill Training Institutes to be set up
- GOI to pay contribution of 8.33% for all the new employees enrolling in EPFO for the first 3 years of their employment.
- Investment in Road Sector
Sum of Rs. 97000 crore (14580.437 Million USD)
- Pradhan Mantri Mudra Yojana
Target amount to be sanctioned- 180000 crore (27056.48 Million USD)
- Aadhar Framework to be announced.
- Total expenditure to be 19.78 lakh crore (297320.657 Million USD)
- Non plan Expenditure kept at 14.28 lakh crores (214648.078 Million USD)
- 100 % deduction for profits in an undertaking in housing project for flats up to 30 square m in the four metros and 60 square m in other cities, approved during June 2016 to March 2019 and completed in 3 years. MAT to be applied.
- Additional tax at the rate of 10% of the Gross Amount of Dividend to be payable by recipients receiving dividends in excess of Rs 10 lakhs per annum.
- Excise duty of 1% without input tax credit on articles of jewellery (excluding silver jewellery, other than studded with diamonds and some other precious stones), with a higher exemption and eligibility limits of 6 crores and 12 crores respectively.