February 1stmarks the day Union Finance Minister Nirmala Sitharaman presents the interim Budget for FY2024-25 to Parliament, a highly anticipated day not just for businesses but ordinary citizens as well, a day that can change corporations’ business plans and set the stage for both new and old companies, whether they want to enter the Indian market or perhaps leave it.
But why? What makes this day so important?
To understand that, we first need to understand what the Budget is.
From its conception, the Union Budget’s top priority is to guide, develop, and strengthen the economic status of India while ensuring social justice and equality for its people.
Think of the Budget as an annual financial statement put out by the Union Government.
Each year, the Union Government gives out a detailed report for government expenditures; this is for Defence, infrastructure projects, welfare schemes. Basically, all government expenditure for the FY is presented in parliament; the government also discusses economic incentives given to individual citizens through welfare schemes and private corporations with tax rebates or other such benefits to set up shop here and might also make changes in the tax regime.
The Union budget is presented in two halves: Capital and Revenue budget.
CAPITAL BUDGET
This is a detailed record of government-related capital payments and receipts.
Capital receipts is the money that the Union Government borrows from the public, the RBI, and foreign intuitions or countries.
While Capital Payments are the Union Government’s expenditure, the sectors where we see the government spending on capital expenditure would be education, health facilities, development, and maintenance of machinery, to name a few.
REVENUE BUDGET
The Revenue Budget is a detailed record of all the revenue expenditures and receipts of the Union Government, which means the amount of money made by the Union Government for their expenditures. If the money made by the government is less than their expenditures, they incur a revenue deficit.
WHAT MAKES THE BUDGET SO IMPORTANT?
The Budget is critical for every citizen and business in India; it indicates to the public where the government wants to focus its investments the most and where it wants to reduce them.
Public servants’ salaries and pensions are affected during the Budget; different sectors could see a considerable boost or reduction in government investments, and private companies could see substantial financial incentives for setting up new factories and offices here. At the same time changes in taxes for products could see these companies hesitate before entering the Indian market perhaps even leave it.
Any change in the tax slabs would have a direct impact on every Indian, and welfare schemes that see any increase or decrease in their Budget would see a strong effect on the ground for hundreds of millions of Indians.
CONCLUSION
Every aspect of the Indian economy is shaped by this one day, and any major changes would directly affect everyone. As a citizen, you should pay attention to the Budget as it will help you understand the goals and the plan for taking the country forward.
