Last Updated: January 12, 2023, 15:56 IST
Union Finance Minister Nirmala Sitharaman will present her fifth budget in Parliament on February 1, 2023. Preparation for the Union Budget 2023 is in full swing with the finance ministry holding meetings with relevant stakeholders. Ahead of the Budget different industries and taxpayers are expecting more tax sops. While salaried employees will look forward to tax exemptions, businessmen will look for GST exemption.
Preparing the Union Budget is a tedious process and it might be difficult for a common man to understand the allocation. So we have thought of breaking it down. This article is for all those people who consider it hard to decode the allocation of money in the Budget.
According to Article 112 of the Constitution of India, the Union government ought to provide Parliament with an account of anticipated revenues and expenses for each fiscal year, which runs from April 1 to March 31. Our Constitution does not include the word ‘budget’ but uses the term ‘annual financial statement’, which is commonly known as the Union Budget.
The government’s total revenue can be divided into two sources—tax revenue and non-tax revenue. The major share of the government’s receipts come from borrowings and taxes. While tax revenue contributes nearly 46 per cent, borrowings account for nearly 35 per cent. Out of the total tax revenue income tax contributes 15 per cent, Goods and Services Tax around 16 per cent and corporate tax another 15 percent. Government receives 7 percent of its revenue from Central excise duty while custom duty and non-tax income account for 5 per cent each. The government also receives nearly 2 percent from non-debt capital.
Interest costs take up the lion’s share of government spending. Nearly 20 percent is spent on interest while 17 percent of income is spent on distributing the shares of the states on taxes and fees. 15 percent is allocated to Central government sponsored schemes while nearly 10 percent goes towards the salaries and expenditures of government departments and autonomous bodies. Miscellaneous expenditure accounts for nearly 9 percent while 8 percent goes to defence and another 8 percent is allocated for subsidies. Nearly 4 percent goes towards pensions.
Read all the Latest Business News here