The day the Union Budget is presented in the parliament is the day when broadcast news remains incomprehensible to most of us, except maybe the ticker running below, where we learn what goods and services are going to cost more.
This is not surprising, given the Union Budget has several documents- some of them very voluminous. The people talking on TV are also not helpful when they use jargon. Moreover, in the hurry to produce news, it is not always that a journalist will dig through the details of particular schemes that concern a particular person or community. Budget Highlights run as news can be misleading. It is only after reading through the government’s detailed plan of expenditure that you can tell government’s priorities even within particular departments.
With the Budget Session advanced this year and assembly elections in several states near, it is even more likely that newspapers and television will miss the issues, schemes, departments, etc that affect you. So here we have an easy steps-to-guide on navigating the Union Budget without much fuss:
Should I Read The Budget?
The Union Budget is the document in which the government tells the country how it plans to spend in the next year and what it plans to earn. Whether you are student, visit government hospitals, or use government services and schemes, you would want to know whether the government is planning to shortchange you or spent less on you than it promised earlier. The budget documents are the key to verifying that.
Where do I Read The Budget?
The Union Budget for the current fiscal year is available here online along with the budgets for previous years. Alternatively, it can also be found on the Ministry of Finance’s website.
How Do I Read The Budget?
1. The budget comes with an explainer, a key to budget documents. This document is not very long and explains all the basics about the budget in a very simple manner. If you have read this, you already know a lot about the manner in which government money is spent.
2. The Budget Speech and the Budget Highlights are important documents that you can go through, as they will have important announcements that the government is making for the next fiscal year. However, watch out for schemes that have merely been restructured or renamed and are being presented as new.
3. The next important document is the Expenditure Budget Volume II. This is where you get to know how government’s ministries, departments, schemes, etc fared in their planning and what is the plan for them in the next fiscal year.
BE, RE, Actual: The expenditures of the government under each head here are listed as Budget, Revised, and Actual. The Budget Estimates (BE) tell us how the government planned to spend at the beginning of a financial year. However, as the year progresses, ministries and departments might make demands from the government for grants and this estimate is revised. The Revised Estimate (RE) is thus presented with an year’s lag. The actual expenditure, the final word on how much money the union government released, is presented in the Budget with a two-year-lag. This year, for example, we are going to learn the actual expenditure for the financial year 2015-16.
Example: At the beginning of 2015-2016, funds for the Ministry of Women and Child Development were slashed to Rs. 10,382.40 crores. The Minister criticised the government for the cut and cried foul over the effect this had on key schemes and by the end of the year the government had to come around to giving the Ministry an additional Rs. 6,969.40 crores.
a. If you are interested in how well the government planned its year, you would be comparing the BE with RE and Actual spending for a particular year.
b. Depending on their interests, different people also compare the BE for the current year with the RE for the previous year or the BE for the current year with the BE for the previous year. Next time you hear outrageous claims or are suspicious of claims being made by people talking about the budget, it would be instructive to check what estimates they were comparing.
c. If you are interested in a particular scheme though, the Union Budget isn’t the only document that can help you. Parliament answers, individual websites of each scheme, etc are also helpful resources for finding out government spending.
4. There are several other important documents that come with the Union Budget. Receipts, for instance, tells you how and where the government created funds for itself and what its estimates for the same are in the next year. Finance Bill and Memorandum tell you about the changes in taxation introduced. If you want to dig deeper, you can also go through these and other documents.
5. With the Planning Commission replaced by the NITI Ayog and the final five-year-plan ending in March 2017, there will be changes introduced in the presentation of the Budget this year. If you have read a budget before or are interested only in particular schemes, this shouldn’t trouble you.
But if you are looking to go deep down into government functioning and priorities, it would be helpful to go through the Budget Division circular here from September 22 last year regarding the changes this year.
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