Budget Sequel– A second budget in the same calendar year
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As we all know, the government requires funds for its expenses throughout the year. To obtain these funds, it must seek approval from the Lok Sabha. This means that if the government intends to spend money on schemes, infrastructure, defense, security, and health, the funds must be allocated from India’s Consolidated Fund. The process of obtaining permission from the Lok Sabha to withdraw funds is known as the budget.
Recently, the NDA government, led by PM Narendra Modi, has been elected for the third time. Finance Minister Nirmala Sitharaman has taken charge to present this year’s budget for the second time, commonly referred to as a sequel to the previous budget.
Story behind budget sequel
You might wonder why there’s another budget when we already had one earlier this year on 1st February 2024.
The reason lies in India’s electoral process. During an election year, the government needs to pass an interim budget for a shorter period until the new government is established and can pass a new budget. This interim budget, often known as a vote on account, ensures the smooth functioning of state operations for a few months, typically 3-4 months, until the new budget is enacted. Since 2017, the annual budget has been presented on 1st February, covering income and expenditure details from 1st April to 31st March.
Even though it’s the monsoon session and not February, the government must pass another budget that will run from the day the bill is passed until 31st March 2025, allowing it to outline its future strategy.
Understanding the Sessions
Now you might be wondering what the monsoon session is and if the budget is not usually presented during this session, then in which session should it have been presented?
There are three sessions of Parliament:
Budget Session (February to May):
- The Budget session traditionally took place from February to May every year.
- It is considered a crucial session where the Finance Minister presents the budget on the last working day of February.
- During this session, members discuss various aspects of the budget including taxation matters its disinvestment strategy
- The session is typically divided into two parts with a one-month gap between them.
- It begins with the President’s Address to both Houses of Parliament.
Monsoon Session (July to September):
- The monsoon session occurs from July to September every year.
- It follows a two-month break after the budget session.
- This session focuses on matters of public interest and legislative business.
Winter Session (November to December):
- The winter session runs from mid-November to mid-December annually.
- It is the shortest session and addresses pending legislative matters.
Matters incorporated in the budget include:
- Sources of income
- Methods of expenditure
- Investment plans
- Disinvestment plans
- Economic growth forecasts
- Employment generation plans
- Sector-specific incentives
- Infrastructure and transportation
- Specific schemes for demographic dividends
Difference between Full budget and Interim budget
| Full budget | Interim budget |
| Annual budget is presented by central govt. for full financial year | Interim budget is pass only in election year for 3-4 months |
| Union budget is pass in Lok Sabha after all discussion | Without discussion bill is passed as it is vote on account |
| All details of income and expenditure of last year is presented | Details are given here as well but not in much depth |
| New schemes are launched and for which another fund is allocated | Funds are allocated for existing schemes only |
GST council meeting – 10 key highlights
Did you hear about the new updates related to GST? Here’s the scoop in a nutshell:
- For all solar cookers, no matter what powers them, a flat 12% GST rate is on the cards.
- Great news for train travelers! Services like platform tickets, retiring rooms, cloakroom services, and more offered by Indian Railways are now exempt from GST. How cool is that?
- Students staying in hostels located away from school can breathe easy as they are also exempt GST.
- When it comes to milk cans, they will all be taxed at 12% regardless of what they are made of as long as they have a standard shape.
- Whether you’re using corrugated paper or non-corrugated paper for carton boxes and cases, a uniform 12% GST rate will apply to all types.
- Need sprinklers? Well, guess what? All types of sprinklers, including fire water sprinklers, will attract a 12% GST rate.
- To tackle fraudulent invoice claims, biometric-based Aadhaar authentication is being rolled out nationwide. Say goodbye to fake invoices!
- If you’re a small taxpayer, you now have until June 30 instead of April 30 to furnish your details and returns in form GSTR 4. Phew! More time!
- Good news for those hit with demand notices – interest and penalties will be waived under Section 73 of the GST Act. But remember: no fraud allowed!
- Setting monetary limits for filing appeals has been suggested: Rs 20 lakh for the GST appellate tribunal, Rs 1 crore for the High Court, and Rs 2 crore for the Supreme Court.
Nirmala Sitharaman’s Historic Role:
Notably, FM Nirmala Sitharaman is set to make history by becoming the first woman to consecutively present the budget for the seventh time. Her role underscores a significant milestone in India’s financial leadership.
Conclusion
India’s growing economy has become a magnet for foreign investors seeking potential opportunities. With expectations of a significant 45,000 crore budget this year, all eyes are on the forthcoming fiscal policies. This budget holds the key to shaping investment decisions, offering insights into India’s strategic priorities and economic direction.
By delving into the intricacies of India’s fiscal policies, the budget sequel highlights the nation’s proactive approach to economic governance. Stay tuned as we unravel the latest updates and insights into this pivotal financial event.
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