INDIAN FISCAL POLICY/BUDGET

 11. INDIAN FISCAL POLICY/BUDGET


Fiscal Policy refers to the management of revenue and capital expenditure finances by the state. It includes budgetary activities of the government that is revenue raising, borrowing and specified objectives.


"Budget: The term Budget is actually derived from a French word Bougette, which means a sack or pouch. It was first used in France in 1803. In the Constitution of India the term Budget is no where used. It is rather mentioned as Annual Financial Statement under Article 112 comprising the revenue budget, capital budget and also the estimates for the next fiscal year called budgeted estimates.


Budget System was introduced in India on 7th April, 1860, James Wilson, the first Indian Finance Member, delivered the budget speech. The financial year for the Union and the State Governments in India is from April to March. Railway Budget was separated from General Budget in the year 1924 on the recommendations of Acworth Committee into about Railway Budget not being separate anymore.


Budget is presented each year on the last working day of February by the Finance Minister of India in Parliament.


The budget is prepared by the Budget division in the Ministry of Finance (MoF). The three parts in which the government account is kept: (i) Consolidated Fund (Article 266); (ii) Contingency Fund (Article 267); and (iii) Public Account (Article 266).


The Annual Budget: The annual budget of the central government provides estimates of receipts and expenditure. The budget consists of two parts viz: (i) Revenue Budget and (ii) Capital Budget.



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