Budget 2016: All basic things you must know about Budget of India.

WHAT IS THE BUDGET?

A Government budget is a legal document that is:  

  • Passed by the legislature.  
  • Approved by the President. 

It is an annual financial statement of estimated receipts and
expenditures of the Government of India in respect of each financial year. 


WHAT ARE THE DIFFERENT TYPES OF BUDGET PRESENTED? 

The Union Budget is presented to the Parliament in two parts: 
a. Railway Budget pertaining to "Railway Finance". 
b. General Budget, which gives an overall picture of financial position of the Government of India. It includes the effect of "Railway Budget”. 



WHY DO WE NEED A BUDGET? 

Government Budget is designed for optimal allocation of scarce resources.

The main objective of Government financial management is to determine how adequately the financial and resource management responsibilities have been discharged.

It requires the broad objectives of the Government to be broken down into detailed work plans for each programme and sub-programme, activities and projects for each unit of the Government organization. 


HOW IS THE BUDGET PREPARED IN INDIA? 

Budget preparation in India is a calculative process between the Ministry of Finance and the spending Ministries. 
It is a combination of: 
a. Top down approach with the Ministry of Finance issuing guidelines or communicating instructions to spending Ministries, and 
b. A bottom-up approach, wherein the spending Ministries plan and present requests for budget allocation.
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