The government, as we have established already, is basically a very large joint family. Think the Viranis from Kyunki Saans Bhi Kabhi Bahu Thi, except not just Gujaratis, but also Tamilians, Kannadigas, Maharashtrians, Bengalis, well… basically everybody in the country. Not to forget the fact that this joint family’s population is, well, 1.3 billion people. A billion, just for our revision’s sake has 9 zeros. And for some more mindboggling context, all of Europe – an entire continent – has 743 million people. That is over 40 countries and half the population of India. Even all of Africa does not have 1.324 BILLION people. So basically, the expense account of this joint family is continentally monumental. So how do we do it?
When planning a ghar ka budget, we have to first take care of the essentials right? Daal roti khaane hain, prabhu ke gunn bhi gaane hain. But can we have caviar this month? Or is it for next month? Can we go on holiday this month? Do we have to go on holiday this month? Or can this wait? Does Pintu need IIT coaching, or are his college classes enough? Should we upgrade the car or is the old one okay with some re-upholstering? Just like mummy papa think of all these things, so does the Finance Minister ka parivaar. Except his parivaar is the entire nation.
The first order of business in this household, as in any other, is prioritizing. The government has to set aside funds for infrastructure, welfare schemes like NREGA, subsidies and salaries, among many many other requirements for the batti of the household to keep burning.
Which brings us to the important question of paise kahaan se aate hain? Tumhara baap dega? Well, in the nation, we are all each other’s baaps. The taxes we pay, the earnings we as a nation make, takes care of the rest of us. And how do we spend it? That’s what the budget is all about. There are two ways in which the money is allocated. We are now talking about the Spending Streams.
SPENDING STREAMS
From this year onwards, all government spending will be listed under two heads: Revenue Expenditure and Capital Expenditure. Now if they seem like big words you see in a macroeconomics textbook, it’s because, well, they are. We at Moneycontrol are here to simplify them for you.
Revenue Expenditure: Now this is the amount spent on day-to-day running of departments, interest payments, subsidies and salaries. In the Hindustani Joint Parivaar a la The Viranis, revenue expenditure translates to spending on the basics of day-to-day living – roti, kapda, makaan, bijli. People who work for the government need to be paid, no?
The second stream is Capital Expenditure: Now this is the money spent on creating assests and investments in land, machinery, and projects. This is like the mother of the joint parivaar saying, “Chalo, kuchh gold khareed ke rakhte hain abhi, jab Chameli ki shaadi ki time aayegi, tab humein sochne ki naubat nahi hogi”. It is essentially planning for the future. Buying a house – let’s say. “Should I buy in in Bandra, or should I move a little further to Andheri? Or perhaps Versova is all I can afford for now. But really can I even afford a house at this point? Maybe I should stop eating out altogether, you know… And really, do I have to take an Uber all the time? Could I not take the train? It’s a lot quicker, and I’ll save some money. Maybe I can then buy a little flat in Versova”… Sorry sorry, I had my own internal monologue going. But that is pretty much the same kind of monologue that goes in the finance minister, Papa Jaitley’s head, when he is writing the budget.
And finally, a quick look at how big the Hindustani Joint Parivaar budget has gotten. In 2004-05, the size was about 500,000 crores. And in a swift span of thirteen years, take a guess as to where it might be? Double? TRIPLE? BHAI. We have gone FOURPLE! Even the right word is not coming to me. We have QUADRUPLED the size, bhaiyon evam behnon, to over 200,000 crores in total expenditure.
Bhai, can you imagine how much toor dal I would have to buy for a family of 1.324 billion? It’s a good thing I don’t even know how to make daal. It’s all mummy’s problem. Or in this case, Mr Arun Jaitley’s. You know… something tells me, I am not jealous of his job.
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