Union Budget 2022 - Things to Know About
As the Finance minister gets ready to present the Union Budget on February 01st 2022, there are a lot of questions that people have in their minds about the budget nuances. Here is a quick take on the finer aspects of the Union Budget.
What is the period that the Budget 2022 will refer to?
The reference period for any Union Budget is the financial year or fiscal year that extends from 01-April to 31-March. Now there are 3 aspects of this financial year that the Budget 2022 will actually present on 01-Feb.
1) It will present the Budget Actuals for the financial year 2020-21 extending from April 2020 to March 2021.
2) It will present the Revised Estimates for the financial year 2021-22 extending from April 2021 to March 2022.
3) It will also present the Budget Estimates for the financial year 2022-23 extending from April 2022 to March 2023.
When will the provisions of the Union Budget become effective from?
Normally, when any announcement is made in the Union Budget, the effective date of implementation is also mentioned in the Union Budget document. For example, some of the major changes may be effective from a future date. However, there are two things to note on implementation.
All direct tax provisions contained in the Finance Bill are by default effective from April 01st 2022 onwards. On the other hand any indirect tax changes pertaining to GST, excise or customs (unless otherwise stated) are effective immediately from the next day itself.
At what time is the Union Budget presented and is the date always 01-February?
Budgets have evolved over time. Till the late 1990s, the Union Budget was presented in the evening after 5 pm on the last working day of February. Subsequently, the timing was shifted earlier and the Finance Minister normally starts the budget speech around 11.00 am and concludes by 1.00 pm in the afternoon. In the last few years, the Budget date has been shifted from the last working day of February to the first working day of February to give more time to the members to debate the budget.
Is the Union Budget effective as soon it is presented in the House?
You must be aware that the budget presentation normally happens during the Special Budget session that is specifically called to debate the budget. After the budget is presented in the house, the clauses of the budget are taken up for debate in both the houses of Parliament. The budget is a bill and has to be passed in the Lok Sabha and the Rajya Sabha by a majority. Only after that the Budget becomes an Act and is implemented.
What is meant by Revenue Budget and Capital Budget?
They are both part of the Union Budget that is presented by the Finance Minister. The Union Budget consists of two sections viz. the Revenue Budget and the Capital Budget. The Revenue budget talks about the revenue receipts and revenue expenditure of the government that are routine in nature. In India, the revenue expenses have normally exceeded the revenue receipts. This gap is called the revenue deficit of the government.
The Capital Budget talks about capital expenditure and capital receipts. These are normally in the form of asset creation, investments in plant, machinery, buildings etc. Receipts are in the form of non-recurring repayment of loans, grants etc. The gap between the total receipts and the total expenditure is called the Budget Deficit or the Fiscal Deficit. The fiscal deficit estimate normally determines the government borrowing program for next year.
Who formulates the complete Budget document?
The budget provisions are based on the Economic Survey and the interaction of the Finance Ministry team with the key stakeholders ahead of the Budget. These stakeholders include industry associations, bankers, industrialists, traders, academicians etc. Normally, the budget exercise is led by the Chief Economic Advisor (CEA). However, this year, the CEA, KV Subramanian, stepped down on 17-December to pursue academics. The new CEA, V Anantha Nageswaran, was only appointed on 27-January.
In the absence of the CEA, the responsibilities were shouldered by four key members viz. T V Somanathan (Finance Secretary), Tarun Bajaj (Revenue Secretary), Ajay Seth (Economic Affairs Secretary) and Tuhin Kant Pandey (Disinvestment Secretary). The Budget was made under the guidance of the finance minister, Nirmala Sitharaman. Normally, the Union Budget has the final stamp of the Finance Minister and the Prime Minister too.
What is the Halwa Ceremony ahead of the Budget Printing?
The Halwa is a traditional Indian sweet that is prepared before the Budget Document goes to print. However, since 2021 Union Budget, the Finance Minister has made it a digital Budget with no physical copies printed. For Budget 2022, it will once again be a digital budget with no printing of the budget document. In addition, the traditional Halwa Ceremony has been dispensed with this time around.
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