Last Updated on Jan 31, 2022 by Manonmayi
The Union Budget is finalised after months of deliberation and analysis. On the scheduled date, you can find everyone, from CAs, analysts in the market, traders, and retailers to the common man tune in to see what the finance minister brings to the table and their lives. This is because the Budget, directly or indirectly, affects every individual in the country.
If you feel overwhelmed trying to keep a tab of all that is going on, read the details below to pick up pointers to watch out for in the upcoming Union Budget 2022.
This article covers:
- What is the Union Budget?
- When will the Budget 2022 be presented?
- Who will present the Budget?
- How long is the Budget session?
- What are the components of the Budget?
- What are the expectations from Budget 2022?
What is the Union Budget?
According to the Indian Constitution, the government must present a financial statement of its estimated expenditure and receipts for the year. This is known as the Union Budget. The Budget is prepared for the fiscal year, beginning from 1 April to 31 March. It is also known as the annual financial statement.
When will the Budget 2022 be presented?
The Union Budget 2022, is estimated to be presented on 1 February 2022 at 11:00 AM.
Earlier, the budget presentation happened on the last working day of February. However, in 2016, Finance Minister Arun Jaitley changed this colonial-era practice. Under the NDA government, the Budget was presented at the beginning of the month for the first time. The idea was to give more time for the changes to set in before coming into effect from 1 April – the start of the financial year.
Another British-era tradition that changed was the time of the Budget announcement. Due to the time difference between India and Britain, the budget announcement took place at 5:00 PM. This changed in 1999, when Finance Minister Yashwant Sinha, under the Vajpayee government, decided to announce the budget at 11:00 AM instead.
This had an impact on the processing of the Budget because people earlier had the night to analyse the changes.
As far as traditions go, another one is regarding the preparation of the budget. The final assembling starts about a week before the presentation. The public servants involved in the process stay isolated, keeping the sensitivity and secrecy of the information intact. As per tradition, the task of compiling the Budget is interestingly kicked-off with the Union Finance Minister serving halwa to everyone involved! The sweet dish indicates good luck before starting any important work. There are, of course, various theories around this too. However, there was a break in this tradition this year (2022). The Finance Minister instead distributed sweets to the core staff.
Who will present the Budget?
The Budget is presented in the Parliament by the Union Finance Minister every year. In 2022, Finance Minister Nirmala Sitharaman will undertake the task. This will be the 4th budget presented by her.
In 2019, Sitharaman became the second woman in India to present the annual budget. She is also the only woman to present 3 (soon to be 4) Budgets in independent India.
Nirmala Sitharaman has also made noticeable changes in the presentation norms, most of which were given by the British. Up until 2019, the budget was printed and carried in a leather briefcase. Though a seemingly minor thing, it had become a tradition. In 2019, Sitharaman broke this practice by carrying the budget in a bahi khata, a traditional red cloth. The move remained the talk of the town for many days.
Last year, she became the first finance minister to present a paperless budget. This came under the Covid-19 protocol but was also an indicator of the Modi government’s focus on Digital India.
How long is the Budget session?
The time for which the Budget session lasts is about an hour and a half to two hours. However, Finance Minister Nirmala Sitharaman is known for her long speeches. So if you are someone who is looking for live updates, sit tight.
In 2019, Sitharaman broke Finance Minister Jaswant Singh’s record of 2 hours 15 min for the longest budget speech ever. She gave a speech that lasted for 2 hours 17 min. In 2021, she broke her own record by presenting for 2 hours 40 min, making it the lengthiest Budget presentation in Indian history.
What are the components of the Budget?
The annual Budget has two components – Revenue Budget and Capital Budget.
Revenue Budget is a statement of the government’s revenue incomes and expenditures. These are the inflows and outflows that happen during everyday functioning. The receipts are divided into two: tax and non-tax receipts. If the revenue expenditure exceeds the revenue receipts, a revenue deficit arises.
Capital Budget shows the capital expenditure and capital income of the government. These are long-term transactions. A major source of capital revenue for the government is through borrowings from the RBI, public, or governments of other countries. Capital expenditure is incurred on big developmental projects, such as building infrastructure, improving education facilities, and more.
Excess total expenditure over total revenue gives rise to a fiscal deficit. It is indicated as a percentage of the GDP.
What are the expectations from Budget 2022?
Over the years, people have analysed the budget before and after its declaration. Many people have started bringing in their predictions for the Union Budget 2022.
For starters, there seems to be a focus on developing infrastructure, including new roads and railways. This is because of the increased attention given to the logistics sector. There is also an emphasis on disinvestment and asset monetisation.
Looking at the effect of the ongoing pandemic, health, overall economic, and social growth can be the centre of attention. Many new welfare schemes and job creation opportunities are likely to be initiated.
Many announcements may be affected by the upcoming elections in major states. However, the government is expected to stick to an overall balanced fiscal budget.
Tune in to the live telecast of the Union Budget on 1 February 2022 at 11:00 AM. Finance Minister Nirmala Sitharaman shall announce the roadmap for the financial year starting from 1 April 2022, ending on 31st March 2023. Get ready to discuss the latest changes and witness how they pan out.