Union Budget 2018 to be Out Today | Know Previous Year Highlights |

Dear Students,

Finance Minister Arun Jaitley will present the Union Budget for the financial year 2018-19 on February 1. The first phase of the budget session of the parliament began from January 29 and will continue till February 9. This year’s budget session is crucial as it comes after the Indian government made two very big financial decisions in the last couple of years – Demonetisation and implementation of the Goods and Services Tax (GST). So this becomes very important for all our aspirants to know well about the present as well as the past Union budgets of India as there is high chance that the questions based on these facts might appear in your examinations.

Origin of the word “Budget”-

The word “Budget” was derived from the Middle English word “bowgette”, which came from Middle French ‘bougette’- meaning a leather bag. The Budget speech of the finance minister normally has two parts. Part A deals with the general economic survey of the country while Part B relates to taxation proposals.

India’s Union Budget was leaked in 1950

A certain portion of India’s Union Budget was leaked in 1950 when the printing used to take place at the Rashtrapati Bhavan. Later, the venue was moved to a government press on Minto Road in Delhi after the leak. The North Block basement at the capital’s Secretariat Building has become the permanent place for printing Budget papers since 1980.

How is the Union Budget kept secret before being presented?

The Budget is printed at the North Block’s basement in Delhi, where over hundred officials are locked for over a week with no social interaction till the Finance Minister presents the Budget. A single phone is available on which the families of officials can leave messages. Electronic jammers are installed ensuring that no information is leaked using mobile phones.

Why was the 1973 Budget called the Black Budget?

India’s Union Budget for 1973-74 was called the ‘Black Budget’ as the nation had a deficit of Rs550 crore. The Budget was presented on February 28, 1973, by then Finance Minister in the Congress government, Yashwantrao Chavan.

Pre Independence Budget-

1. The Budget was first introduced in India on 7th April 1860 from East-India Company to British Crown. The first Indian Budget was presented by James Wilson on February 18, 1869.

Post Independence Budgets-

2. The first Union Budget of independent India was presented on November 26, 1947, by the first finance minister of Independent India, RK Shanmukham Chetty.

3. The highest number of budget presentations have been made by former finance minister Morarji Desai. He presented 10 union budgets, followed by P Chidambaram’s 9 and Pranab Mukherjee’s 8.

4. On February 29 in 1964 and 1968, Morarji Desai became the only finance minister to present the Union budget on his birthday.

5. After Morarji Desai’s resignation from finance minister’s post in 1969, Indira Gandhi, the then Prime Minister of India, took over the Ministry of Finance to become the only woman to hold the post of the Finance Minister. She remains the only woman finance minister of India till date.

6. The 1997-98 Union Budget, presented by the Finance Minister P Chidambaram, was termed as “Dream Budget” as a number of economic reforms were done including lowering income tax rates, removal of the surcharge on corporate taxes and reduced corporate tax rates.

7. Until the year 1999, the Union Budget was announced at 5 pm on the last working day of February. The former finance minister in the NDA government Yashwant Sinha, however, changed the ritual by announcing the 1999 Union Budget at 11 am.

8. Till 2016 the Union Budget was presented on the last working day of February. Finance Minister Arun Jaitley, however, changed that tradition in 2017, the Union Budget was presented on February 1.

Few Important Terms Used in the Union Budget are-

Appropriation Bill
It is a Bill presented to Parliament for approval. Once passed by Parliament, becomes an Act authorising the government for withdrawal or appropriation from and out of the Consolidated Fund of India.

Consolidated Fund
All revenues received by the government deposited in the form of the Consolidated Fund of India. It comprises loans raised and recoveries of loans. The government needs to seek Parliament’s approval for withdrawing money from the Consolidated Fund.

Contingency Fund
For a situation when Parliament’s approval for withdrawing money from Consolidated Fund is not possible, there is another fund by the name of the Contingency Fund. The government can withdraw money from this fund in the time of emergencies to meet unforeseen and urgent expenditures.

Bank Credit
It means loans, cash credit and overdrafts by banks. It also includes inland bills and foreign bills purchased and discounted.

Budget Estimates
Budget estimates refer to estimated expenditure of the government during the next financial year and revenue collection in the form of tax revenues.

Capital Budget
It is the list of planned capital expenditures mentioned in detail in the Budget document.

Balance of Payment
It is the balance sheet of the country’s trade and financial transactions. It also factors in net outstanding receivable or payable from other countries over the last one year.

Current Account Deficit
It is an excess of expenditure over receipts on current account in balance of payments during the fiscal.

Current Account Surplus
If receipts are more than the expenditure on current account in balance of payments during the fiscal year under consideration, the situation is called Current Account Surplus.

Fiscal Deficit
It is the gap between Centre’s receipts in the form of revenues from taxes and payments made for running the government and towards interest payments.

Budget Deficit
It is a part of fiscal deficit presented in the Budget document. It refers to deficit between expenditure and revenue collection, which is met by borrowing by the Centre from agencies like World Bank, IMF or other countries and agencies.

Basic Exemption
It is the amount of annual income that is exempt from income tax. However, the person would be paying taxes on all of the purchases that he/she might make. The income would not be directly taxed by the government. The current basic exemption limit is Rs 2.5 lakh per year.

Direct Taxes
Taxes, which affect consumers directly, are direct taxes. Examples of direct taxes are income tax, corporate tax and capital gains tax.

Indirect Tax
Taxes which are charged on goods produced, imported or exported : Excise and Customs duties

Disinvestment
It is selling off the government’s shareholding in a public sector undertaking partially or fully.

Foreign Direct Investment
Investment in India made by a foreign based company through one of its branch or a representative office or a subsidiary company set up in India.

Foreign Institutional Investor
It is firm incorporated outside India and makes investment in India.

Gross Domestic Product (GDP)
It is the sum total of market value of all the finished goods and services produced in the country during the financial year. Broadly, it is compiled under three sectoral headas – Agriculture, Industry and Services.

Gross National Product (GNP)
It is the GDP plus income by resident Indians from their foreign investments minus money earned by foreigners from their investments in India.