Union budget is a systematic plan for the expenditures of a government fixed income earned by taxation during a given period of time, generally in one year. It is the most important financial & economic event in India which is officially presented by the Finance minister of India for one fiscal year that runs from 01 April to 31 March.
Union Budget is comprised of revenue budget, capital budget and an estimate for the next fiscal year.
Revenue budget includes the receipts and expense of government revenue generally earned by taxing goods and services within & outside its boundaries. Now, there are two kinds of revenue Receipts: -
i. Tax Revenue
ii. Non- Tax Revenue
And government expenses includes all expenditure disburse on all citizens to offer various social services. There is a situation when government has not ample money to invest in the country. It is known as Revenue Deficit.
A Capital budget is comprised of capital receipts and expense of the incumbent government. Here, Loans from RBI, Public in the form of Bonds, NSC (National savings certificate) etc. are the major part of capital receipts and expenditure refers to the disbursement of money on machinery development, Equipment, health facilities, education etc. When Capital expense becomes higher than capital receipts, then it is known as fiscal deficit. In union Budget, Finance ministry has to consider these issues as well.
Union Budget is presented by the Finance minister in the parliament on the last working day of February except few exceptions like elections. But it has to be passed by the Loksabha to come in action on 01 April.