The Interim Budget for year 2019-2020 was presented recently amidst various controversies. Though there is no separate mention of term ‘Interim Budget’ in Indian constitution, the presentation of interim budget has been the norm during election year by the Union Government.

The interim budget is supposed to be an interim arrangement till the newly elected Government takes over the charge and finalises the taxation and expenditure related policy measures. Every responsible citizen of India must be aware about various aspects of budget as it deals with the policy decisions of Union Government with regard to the expenditure from Consolidated Fund of India which consists of direct as well as indirect taxes collected from all of us.

The budgetary provisions are not merely the clauses related to Income Tax slabs or tax exemptions but has got larger implications on our lives directly or indirectly. What matters for the competitive examination aspirants is not political mudslinging on the budgetary provisions but its objective assessment and the relevant impact on Indian economy.

 

Understanding Interim Budget-  Ideally, the correct method of study of Union Budget is a three step process in which the aspirants should try to decode the basic concepts and economic terms related to various budgetary provisions, followed by remembering the important facts, figures, welfare schemes in the budget and most importantly, trying to correlate the impact of relevant provisions of budget on Indian economy. The system of budget in India is a British legacy and apart from studying the various provisions mentioned in the budget, the background of Budget, its meaning, constitutional provisions, recent changes in the budgetary clauses, etc. need to focused upon for understanding the budget systematically. Actually the word ‘Budget’ has been derived from the French word ‘Bougette’ meaning ‘a leather bag’ in which the erstwhile Finance Minister used to bring the important financial documents to be declared in the Parliament. As per Indian constitution, the word ‘budget’ has not been mentioned anywhere in the constitution, but Art 112 of Indian constitution deals with the ‘Annual Financial Statement’ of Union Government which is nothing but the budget.

Since year 2017-18, three major changes have been introduced in the Union budget viz. merger of Railway budget with General Budget; no classification as planned and non-planned expenditure in the budget and presentation of Union Budget on first working day of month of February instead of last day of February. It is a misconception amongst many competitive examination aspirants that study of Union Budget means mugging up all the numbers and allocations for various schemes mentioned in the budget. In reality, only important figures and numbers need to be remembered like economic growth rate projected; growth rate achieved in agricultural, industrial and services sector in the past year; Fiscal deficit targets achieved and projected for next year; export growth rate achieved; allocations for key flagship schemes of Government of India; various changes in tax rates including Income Tax rates, Corporate tax rates and so on.

The focus of study of Interim Budget should be on various initiatives by the Union Government with regard to new welfare schemes and allocations for important ministries like Ministry of Agriculture, Health, Defence, Education, Infrastructure sector and so on. The Interim Budget has introduced the PM-KISAN (Pradhan Mantri Kisan Samman Nidhi) scheme for marginal and small landholders. As per the scheme, vulnerable landholding farmer families, having cultivable land upto two hectares, will be provided direct income support at the rate of Rs 6,000 per year. This income support will be transferred directly into the bank accounts of beneficiary farmers, in three equal instalments of Rs 2,000 each. Around 12 crore small and marginal farmer families are expected to be benefited under this scheme.This programme would entail an annual expenditure of  Rs 75,000 crore. Apart from factual information, one needs to analyse the positives and challenges in front of the upcoming scheme. Another highlight of the Interim Budget was ‘Pradhan Mantri Shram-Yogi Maandhan’ scheme for the unorganised sector workers which shall provide an assured monthly pension of Rs 3,000 from the age of 60 years on a monthly contribution of a small affordable amount during their working age.

The factual data and information on various welfare schemes along with the Income Tax related information would be available in budget, but the analytical approach to understand every scheme or initiative by the Government with its pros and cons and its impact on Indian economy should remain the mainstay of our study in understanding of the Union Budget.

(The author of this article ,Lt Col (Dr) Satish Dhage, is an ex Army officer and has been qualified for IPS (Indian Police Services) through IPS LCE 2012. Presently, he is Director, MGM Institute of Competitive Exams Aurangabad. For any queries or feedback, he can be contacted on email id : drsatishdhage@gmail.com)