The Union Budget or Annual Financial Statement of the government, provided under Article 112 of the Constitution of India, elaborates on the estimated allocation of funds to different departments, ministries and schemes. The Budget also provides the details of government receipts in the upcoming financial year.
The budget document is also required to give details of expenditures and receipts in the current financial year and the previous financial year to portray a clear picture of the financial health of the country.
The expenditure and receipt numbers are organised under three categories – Budget Estimates, Revised Estimates and Actuals.
As Finance Minister Nirmala Sitharaman is scheduled to present the Budget 2024 on February 1 in Parliament, let’s take a look at these key terms.
Budget Estimates
Budget Estimates (BE) refer to expected revenue and expenditure by various departments and programs during the upcoming financial year.
The government projects the estimates on the basis of funds sought by various ministries and departments. The government also takes into account the revenue guidance given by the departments concerned during the pre-budget consultations.
The government allocates funds for these programmes before the start of the fiscal but actual disbursement of funds starts from April 1 following the passage of the Appropriation Bill by the Parliament.
The Budget Estimates include revenue receipts of the government, revenue expenditure, capital receipts and capital payments. The government needs to take Parliament’s vote for Budget Estimates mentioned as Demand for Grants for various ministries.
The government mentions the Budget Estimates for the upcoming financial year as well as for the current financial year that were announced in the previous budget.
For example, Union Budget 2024-25 will contain Budget Estimates for FY 2024-25 as well as for FY 2023-24 that were announced on February 1, 2023.
Revised Estimates
The government also mentions the actual figures of funds disbursed or likely to be disbursed by the end of the financial year or the total revenue collected or likely to be collected as Revised Estimates.
Revised estimates (RE) are given against the Budget Estimates for the current financial year only. Revised Estimates are finalised after a mid-year survey of how much of the allocated funds were used, and how much is left. On the basis of the progress, budget estimates for the financial year are revised and are shown as Revised Estimates.
For example, the Union Budget 2024-25 will include Revised Estimates of FY 2023-24.
The government does not require Parliament’s vote for Revised Estimates. But, if the Demands for Grants exceed the limit approved as budget estimates, these need to be passed by the Parliament as supplementary Demands for Grants.
Actuals
In addition to Budget Estimates and Revised Estimates, the government also gives an account of what was actually spent in a financial year. Actuals are given for the previous financial year.
In the Budget for FY 2023-24 following were the Budget Estimates:
Total receipts other than borrowings are estimated at ₹27.2 lakh crore while total expenditure is estimated at ₹45 lakh crore.
Net tax receipts are estimated at ₹23.3 lakh crore. The fiscal deficit is likely to be 5.9% of GDP.
The government projected net market borrowings from dated securities at ₹11.8 lakh crore to finance the fiscal deficit.
The gross market borrowings are estimated at Rs 15.4 lakh crore.
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