EXPLAINED: What is Union Budget and why is it presented on February 1 every year?

Union Finance Minister Nirmala Sitharaman will present the 2022-23 Union Budget on Tuesday, February 1. In Budget 2022-23, Sitharaman will try to address the challenges around life and livelihood posed by the aftermath of the novel coronavirus pandemic. Due to the COVID's new variant of concern Omicron, the International Monetary Fund (IMF) recent cut the country's economic growth forecast to 9% for the current fiscal ending March 31. However, the financial institution, for both 2022-23 and the financial year thereafter, has made an upward revision of 0.5% in respect of India's GDP growth.

What is Union Budget?

According to Article 112 of the Indian Constitution, the Union Budget of India, also referred to as the Annual Financial Statement is the annual budget of the Republic of India. It is presented on the first day of February so that government can prepare for its implementation before the new financial year that starts in April. It is a statement of the estimated receipts and expenditure of the centre for that particular year.

The budget consists of details of the projected receivables and payables of the government for the fiscal. The Union budget is classified into two parts- revenue budget and capital budget.

Revenue Budget comprises of Centre's revenue received (non-tax and tax revenues) and the expenditure. The tax revenue comprises proceeds of taxes and other duties levied by the government. The non-tax receipts comprise interest and dividends on government's investments, fees and other receipts for services rendered by the Centre.

Capital budget account for capital payment and receipts by the government. Capital receipts include loans from the Reserve Bank of India (RBI) or from the public, while capital payment includes expenses sustained towards healthcare facilities, development and maintenance of equipment and educational facilities.

Why Union Budget is presented on February 1 every year?

In 2017, then Finance Minister Arun Jaitley had announced that the Union Budget or the Annual Financial Statement will not be tabled on the last day of February. He said that it will be presented on February 1. Also, he had announced there will be no separate budget for Railway.

Meanwhile, the Union Budget 2022-23 will be presented in a paperless form. A 'Union Budget Mobile App' will also be launched by the government for hassle-free access of budget to MPs and the general public.

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