05 February 2017

The Explainer: What does the Budget consist of?

What does the Budget consist of?
Take a look at the table graphic below. This document titled, Budget at a Glance, is the best document to understand the components of the various types of figures in the Budget. 

The Union Budget 201718 consists of the following:
(a)   Actuals for 201516,(b)   Budget Estimates for 201617,
(c)   Revised Estimates for 201617, and 
(d)   Budget Estimates for 201718.

The Actuals for 2015-16 may be represented as such but they STILL would be PROVISIONAL only. This means that these figures are NOT the final figures for 201516 but are subject to further revision. In fact, the final figures for 201516 will only be available toward the end of Financial Year 201617 (or Fiscal Year ’17).

Budget Estimates (BE) relate to the figures which the Finance Minister set out in his Budget Speech last year (i.e., on 28 February 2016) for the Financial Year 201617.

However, all figures – related to revenue collection, expenditure, other allocations – are subject to change. These numbers are mere ESTIMATES and not actuals. As the year progresses, such figures may sometimes need to be revised. For example, if there is low industrial and agricultural activity (meaning lower economic output), tax collections may dip. This, in turn, will reduce the government’s Revenue Receipts.

In such case, the Government may revise the Budget Estimates (made in the Budget). Such altered figures are labeled Revised Estimates (RE). These RE are listed in the third column.

In the fourth and last column, you will find Budget Estimates for the coming Financial Year 2017-18. These figures reflect the various estimates made by the Government in terms of Receipts (including tax collections) and Expenditures (including interest payments and salary payments to government employees).

No comments: