Objectives of article 112

Article 112 refers to the set of rules for annual financial statements, in other words, the union budget.It includes all rules such as the presence of the president during the budget announcement, consolidated fund, contingency fund, and all the other emergency funds as well.

Types of Union Budget

The Union budget is a layout of the government’s expenditure and revenue for a financial year, which starts from April 1st to March 31st.

There are two types of union budget: 

•  Revenue budget:- revenue budget includes government all revenue receipts and expenditure. These receipts can also be categorized as tax revenue ( income tax, excise duty, corporate tax) and nontax revenue (interest, profit, fines, fees). Revenue expenditure is mainly the regular expenses incurred in the daily functioning of the government. 
• Capital budget:- capital budgets are expenditures and receipts of a long-term nature. Such as receipts of loans from citizens, RBI, and foreign governments. Capital expenditure includes all costs incurred in the development or maintenance of equipment, health facilities, machinery, building education, etc. 

Annual Financial Statement

The annual financial statement is an important document for any business. It provides a snapshot of the company’s financial health and can be used to make important decisions about the future.

The components of  the statement include:

– revenues

– expenses

– net income

– assets

– liabilities

The statement can be used to assess the company’s financial performance and make decisions about investing dividend payments, and other strategic decisions. There can be many uses of the statement, but ultimately it is a tool to help make informed decisions about the future.

For businesses, these statements are one of the first places to look when trying to identify areas of improvement.

Some common ratios that are used to assess a company’s financial health include:

– gross profit margin

– operating expense ratio

– net profit margin

– return on assets

– return on equity

Each of these ratios can give insights into different aspects of the company’s finances. For example, the gross profit margin can show how much profit is being made after accounting for the cost of goods sold. The operating expense ratio can show how efficiently the company is run.

The net profit margin can give insights into overall profitability. And return on assets and return on equity can provide information about how well the company is using its resources.

There are a few things that can be done to improve the financial health of a company. One is to increase revenues. This can be done by increasing sales or finding new sources of income. Another is to reduce expenses. This can be done by cutting costs or negotiating better terms with suppliers. Finally, a company can also focus

Objectives of government budget

Savings and investments are essential for a country’s overall economic prosperity. Budgetary strategies are thus implemented to provide sufficient resources in various government sectors. The government has created provisions to increase the rate of saving and investment in the economy.

Reallocation of resources

The government uses a budget to try to distribute resources and wealth fairly. They promote the growth of small businesses like “Khadi” by providing low-interest loans and lower taxes on raw materials. To discourage the production of dangerous products like cigarettes and alcohol, the government can put high taxes on their manufacture.

Income redistribution

This is another objective of the government budget. To decrease the income gap between the affluent and the poor, the government has implemented several budgetary measures. Subsidies and taxes are examples of fiscal devices.

Monetary soundness Spending plan distinctly centers around bringing down the cost vacillations on the lookout. Approaches like Deficiency financial plan during the collapse and Excess financial plan during expansion flourish with bringing strength inside the economy. 

Cutting the own financial disparity 

The Public authority attempts to bring monetary correspondence to society. They do as such by forcing charges on the prosperous classes of society and spending them for government assistance of the monetarily more vulnerable segment of the local area. 

Do you know – Higher assessment rates on a specific gathering of nationals and associations can seriously affect the general economy.

Funding Public Undertakings 

This is another objective of the government budget. A few public area enterprises are laid out for the social government assistance of general society. A yearly spending plan gives a monetary guide to such organizations to develop. This objective naturally fortifies the financial design of a country. 

Tending to Provincial Dissimilarity

 One of the main points of the Public authority spending plan is to ease social disparity. They accomplish so by introducing fabricating offices in the financially more fragile segment of the general public. Additionally by delivering merchandise and supply straightforwardly.

Conclusion 

The Union budget is divided into two categories i.e revenue budget and capital budget. Accounting financial statements is very important for both business and the government. There are many objectives of a government budget i.e to help people and the government itself. Read more detailed information about these if you want to know more.