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What is Union Budget? Financial Year 2025-2026

Discover the essentials of the Union Budget – a comprehensive financial blueprint of the government. Learn how revenue from taxes and duties is allocated to key sectors like defense, education, health, and infrastructure to drive national growth.

By Vijay Yadav
New Update
Union Budget 2025

The Union Budget is the annual financial statement of India presented by the Government of India. It outlines the government’s estimated revenues and expenditures for the upcoming year.

Indian government financial year date starts on 1st April of the current year & ends on 31st March of the next year. The Union budget is a critical tool for managing the country's economy and reflects the government's policy priorities and development plans.

Union Budget 2025 Date - February 1, 2025

Key Features of the Union Budget

What is Union Budget?

The Union Budget is a detailed account of the government’s financial planning, including:

  • Revenue: Expected income from taxes, duties, fees, and other sources.
  • Expenditure: Allocation of funds for various sectors such as defense, education, health, and infrastructure.

Budget Purpose:

  • Allocate resources effectively.
  • Stimulate economic growth.
  • Address developmental goals.
  • Reduce income inequality.
  • Ensure fiscal discipline.

Budget Components:

The budget is divided into two main parts:

  1. Revenue Budget:
    • Revenue Receipts: Income from taxes (income tax, GST, corporate tax) and non-tax revenue (dividends, interest).
    • Revenue Expenditure: Spending on salaries, subsidies, pensions, and interest payments. These are recurring expenses.
  2. Capital Budget:
    • Capital Receipts: Loans raised by the government, recoveries of loans, and proceeds from disinvestment.
    • Capital Expenditure: Spending on infrastructure, machinery, and asset creation. These are investments for long-term development.

Who Prepares the Budget?

The Ministry of Finance is responsible for preparing the budget under the leadership of the Finance Minister. The process includes:

  • Discussions with various ministries.
  • Input from industry bodies and economists.
  • Approval by the Cabinet.

Budget Presentation:

  • The budget is typically presented on February 1st in Parliament.
  • The Finance Minister delivers a speech explaining key allocations and priorities.
  • It includes a statement of estimated financial performance and proposed measures.

Budget Importance

  • Reflects the government’s priorities for economic growth.
  • Signals the direction of fiscal policy (e.g., taxation, subsidies).
  • Affects businesses, investors, and the general public.

Highlights in Recent Budgets (Examples):

  • Increased focus on infrastructure and health.
  • Incentives for renewable energy and green initiatives.
  • Policies to boost MSMEs and startups.
  • Reforms in taxation and digital economy initiatives.

Let me know if you'd like details about a specific budget year or its impact!