Budget Documents: Demand for Grants, Annual Financial Statement and Appropriation Bill

A budget is an annual summary of government finances that includes a complete account of the state’s income and spending in the preceding year and estimates for the following year’s collections, expenditures, and predictions. Even while the presentation of the finance minister’s budget before Parliament is the element of the budgeting process that is most often thought of when referring to India’s national “Budget,” this is just a very tiny component of the process. According to Article 112 of the IC, the Union Budget of a given year is a summary of the expected revenues and expenditures of the government for that specific year. The annual financial statement is another name for the Union Budget, and both names relate to the same document.

Some of the documents required for the budget in India are as follows:

Annual Financial Statement

Annual Financial Statement (AFS) is the document that is required to be provided under Article 112, and it shows the estimated receipts and expenditures of the Government of India for the next financial year in comparison to the estimates for the previous financial year as well as the expenses for the year before the previous financial year. It is customary practice to refer to the Annual Financial Statement, which serves as the primary document for the budget, as the Budget Statement. The revenues and expenditures are broken down and shown according to the three different components of the government accounts maintained: the Consolidated Fund, the Contingency Fund, and the Public Accounts, respectively.

Demands for Grants

The expenditure estimates from the CFI that are included in the AFS and are required to be voted on by the lower house must be produced or given in the form of Demands for Grants, according to Article 113 of the Constitution of India. This is a constitutional mandate. In most cases, it is necessary to submit a separate demand for each of the primary services that fall within the purview of a Ministry or Department. Along with the Annual Financial Statement, the Demands for Grants are given to the Lok Sabha. In most cases, just one Demand for Grant is submitted for consideration regarding each Ministry or Department.

Receipts Budget

One of the most crucial documents in a Union Budget is the Receipts Budget. It is a comprehensive list of the government’s revenue generated from various sources throughout a fiscal year, and it depicts the breakdown of revenue generated under several headings.

The receipt, part of the government’s Annual Financial Statement, contains information on tax revenue, non-tax revenue, and capital receipts. It also includes data and analysis on tax and non-tax receipts and the year’s budgetary trends.

Appropriation Bill

The Appropriation Bill’s goal is to grant the government the right to take cash from the Consolidated Fund of India to cover expenses that may arise throughout the fiscal year. The administration then introduces the Appropriation Bill to Parliament once the General Discussions on the Union Budget Proposals and the Voting on Demands for Grants have finished.

Statement of the Strategy for Fiscal Policy 

The Statement of the Strategy for Fiscal Policy was given to Parliament following the FRBM Act. This statement demonstrates how the policies that are now in place are consistent with the principles of effective fiscal management. The government’s plan to minimise the budget deficit is laid out in great detail in the fiscal policy statement about the medium term. The government’s strategic goals in the field of finances for the next fiscal year are laid out. 

Statement of Fiscal Policy for the Medium Term

The Medium-term Fiscal Policy Statement ensures a balance between the amount of money received in revenue and money spent on revenue. In the Medium-term Fiscal Policy Statement that was presented to Parliament, the targets for fiscal indicators at market prices that were outlined were as follows: 

• Revenue Deficit

• The ratio of tax to GDP

• Fiscal Deficit

• Debt at the year-end is the total outstanding

These targets are to be met over a rolling period of three years. The use of receipts for the capital to produce productive assets should be included in the medium-term fiscal policy statement.

Budget At A Glance

This is a rundown of the money brought in and spent, along with a definition or two of some essential phrases. In addition to providing general information on tax and non-tax revenues and other receipts and Plan and Non-Plan expenditures, it also includes information regarding the gross primary, revenue, and gross fiscal deficits.

The national economy reflects and helps form the federal budget, which helps shape the budget. The Framework Statement includes an evaluation of the growth rate of GDP, the Central Government’s fiscal balance, and the economic balance of the external sector. In addition, the collection of papers includes Budget highlights, which explain the essential aspects of the budget. Creating a budget may be described as drawn-out and time-consuming; hence, it is essential to be aware of the many phases and procedures involved in comprehending the Union Budget of India.

Conclusion 

The term “revenue budget” refers to the overall budget that the government uses to track its revenue sources and expenditures. The materials about the budget are broken up into several different categories, one of which is a transcript of the Budget speech that the Finance Minister gave in the lower house of Parliament. The Central Government’s Budget is not only a summary of income and expenditures; it also includes other categories of information. The FRBM issues a directive to the government instructing it to analyse the economy’s growth prospects based on predetermined assumptions.