Budget Basics and overview in a simplified manner. Provides useful insights on the topic of budget and ways to evaluate it. Can be easily understood by people of non commerce background.

1. THE UNIONTHE UNION
BUDGETBUDGET

2. ContentsContents
Process followed by the govt. in
preparing the budget.
Composition of budget
Types of deficits.
How is budget expenditure financed?
What are the things in the budget that
one should be aware of?
Highlights of budget 2014

3. TimingTiming
Fiscal year of govt. starts from 1 April and
ends on 31 March.Thus the govt. has to
operationalise the budget from April 1.
However before that happens, it has to
get the budget approved by parliament,
for which the govt. has to allot sufficient
time.
Therefore finance minister presents
the budget on the last day of
February.

4. Process of budgetProcess of budget
Finance minister’s budget speech is in two
parts:-
Part A of the speech consists of economic survey
of the country of the year gone by and it forms
back drop of part B of the speech.
It talks of policy initiatives and review of the
economy.
Part B of its speech includes specific tax proposals.
the financial statement of the government and
various schemes and projects by the govt.

5. Financial StatementFinancial Statement
It consists of 3 accounts:-
1. Consolidated fund
2. Reserve fund
3. Public fund

7. Revenue Receipts- Government receipts
which neither (i) create liabilities nor (ii)
reduce assets are called revenue receipts.
Eg.-Taxes, revenues from PSU’s,etc.
 Capital Receipts- Government receipts
which either (i) create liabilities nor (ii)
reduce assets are called revenue receipts.
Eg.- Borrowing , disinvesments,etc.

8. Revenue Expenditure- Government
receipts which neither (i) create assets
nor (ii) reduce liabilities of the govt. are
called revenue receipts.
Eg.-
 Capital Receipts- Government receipts
which either (i) reduce liabilities or (ii)
create assets are called revenue receipts.
Eg.-

9. SOURCES OF DEFICITSSOURCES OF DEFICITS
 Borrowing from public.
 Borrowing from external financial institutions.
eg.-International Monetary Fund(IMF), World bank.
Borrowing from central bank of the country.

10. Size & Composition of DeficitsSize & Composition of Deficits
According to International Monetary
Fund(IMF) the central government’s fiscal
and revenue deficit as a percentage of
GDP must come down to 3% and 0%
respectively.
According to Finance Minister Arun Jaitely
the government will retain fiscal deficit
target for 2014-15 at 4.1%of GDP.
Reduce it further to 3% of GDP by 2016-
17.

11. Deficit 2005-
06
2006-
07
2007-
08
2008-
09
2009-
10
2010-
11
Fiscal 4.0 3.3 2.5 6.0 6.3 4.8
Reven
ue
2.5 1.9 1.1 4.5 5.1 3.5
Prima
ry
0.4 -0.2 -0.9 2.6 3.1 1.7
(Reve
nue/Fi
scal)
63 56.3 41.4 75.2 80.7 72.5

12. ChecklistChecklist
How much is the projected fiscal and revenue
deficit? Is the government moving towards the
prudent norms of 3percent and 0percent,
respectively?
How much is the revenue deficit as a
percentage of the fiscal deficit? Is the deficit
spending going into asset creation or is it
simply for administrative purposes?
How much is the India’s GDP growth rate? A
better growth rate of, say, 8percent or more, is
an indicator of a positive environment for your
business growth as well

13. Have the personal income tax slabs been
raised for standard deductions?
Is GST finally getting implemented from the
coming financial year.
Is the government going to allow Foreign
Direct Investment (FDI) in multi brand
retailing that may give competition to my
grocery business or any other sectors?

14. The numbersThe numbers
 Total expenditure estimates- 17,94,982 crore.
Gross tax receipts estimates- 13,64,524 crore
Non tax revenues estimates- 2,12,505 crore
Capital receipts estimates except borrowings-73952
crore.
With the above estimates, fiscal deficit will be 4.1% of
GDP and revenue deficit will be 2.9% of GDP.
According to Finance Minister Arun Jaitely the government
will retain fiscal deficit target for 2014-15 at 4.1%of
GDP.
Reduce it further to 3% of GDP by 2016-17.

16. The following are the Union Budget 2014-15 highlightsThe following are the Union Budget 2014-15 highlights
 For individuals
 Tax slab on personal income remains unchanged
 Income tax exemption limit raised by Rs 50,000 to Rs 2.5 lakh and for senior
citizens to Rs 3 lakh
 Exemption limit for investment in financial instruments under 80C raised to Rs
1.5 lakh from Rs 1 lakh.
 Deduction limit on interest on loan for self-occupied house raised to Rs 2 lakh
from Rs 1.5 lakh.
 Kisan Vikas Patra to be reintroduced.

17. NEW PROJECTS
 5 IIMs to be opened in HP, Punjab, Bihar, Odisha and Rajasthan
 5 more IITs in Jammu, Chattisgarh, Goa, Andhra Pradesh and Kerala.
 4 more AIIMS like institutions to come up in Andhra Pradesh, West Bengal,
Vidarbha in Maharashtra and Poorvanchal in Uttar Pradesh
 Govt proposes to launch 'Digital India’ programme to ensure broad band
connectivity at village level.
• National Rural Internet and Technology Mission for services in villages and
schools, training in IT skills proposed
 A project on the river Ganga called ‘Jal Marg Vikas’ for inland waterways
between Allahabad and Haldia; Rs 4,200 crore set aside for the purpose.
 A national multi-skill programme called skill India is proposed to be launched.

18. ALLOCATIONSALLOCATIONS
* Swachh Bharat Abhiyan to cover every household with sanitation facility
by the year 2019.
* Rs 100 crore for metro projects in Lucknow and Ahmedabad
* Rs 2,037 crore set aside for Integrated Ganga Conservation Mission called
‘Namami Gange’
* Rs 150 crore allocated for increasing safety of women in large cities
* Rs. 7,060 crore for the project of developing 100 Smart Cities.
* Set aside Rs 11,200 crore for PSU banks capitalisation
* Govt provides Rs 500 crore for rehabilitation of displaced Kashmiri migrants
* 200 crore for building statue of unity in Gujarat.
* 100 crore for modernisation of madrasas.

19. THANK YOU
Efforts by: Rajkumar Jindal
Sehaj Aggarwal
Mohit Mahajan