Union Budget 2019-20: How to better understand the Finance Bill and Financial Statement

The Union Budget is the annual financial statement that contains the government’s revenue and expenditure for a fiscal year.

FP Research July 04, 2019 12:45:17 IST
Union Budget 2019-20: How to better understand the Finance Bill and Financial Statement
  • Budget may include planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows

  • Financial statement details revenues from all sources, and expenditure on all activities that govt will undertake for the fiscal year

  • A revenue budget comprises of all the revenue expenditure and receipts of the government

The Finance Bill is introduced in the Lok Sabha, after the presentation of the annual Budget, to implement the financial proposals for the following financial year.

Finance Bills can be divided into three categories: Finance bill category I, Finance bill category II and a Money Bill.

How to better understand the Finance Bill

Finance bills (category I and II), on the other hand, generally contain provisions related to taxation and expenditure (as explained in a money bill) or provisions related to any other matter. It is important to note that a finance bill will necessarily be a Money Bill but a Money Bill may not be a finance bill.

Union Budget 201920 How to better understand the Finance Bill and Financial Statement

Representational image.

How to better understand the Financial Statement

The Union Budget is the annual financial statement that contains the government’s revenue and expenditure for a fiscal year. It may also include planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows.

The statement details the revenues from all sources, and expenditure on all activities that the government will undertake for the fiscal year. The fiscal year is calculated from 1 April-31 March.

A revenue budget comprises of all the revenue expenditure and receipts of the government. If the revenue expense is in excess of the receipts, the government suffers a revenue deficit.

The capital budget consists of government-related capital receipts and payments. It includes investments in shares, loans and advances granted by the central government to state governments, government companies, corporations and other parties.

Follow full coverage of Union Budget 2019-20 here

Here is an infographic which explains the process behind the making of the Budget:

Union Budget 201920 How to better understand the Finance Bill and Financial Statement

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