In India, government budget is normally presented in the Parliament in the month of February every year. The budget of a government is a summary of the item-wise intended or expected revenues and anticipated expenditures of the government during a fiscal year or financial year. In India, the financial year spans from 1st April to 31st March over two calendar years.
Government at all levels, whether central, state or a local level, prepare the budget. Budget is prepared, keeping in view the general policy of government towards the welfare of people.
Government incurs various expenditures to provide basic facilities such as education, health, etc. It also spends money to increase production, to reduce unemployment, poverty and inequalities in income and wealth, etc. Such expenditure of government promotes welfare of the people.
To finance this expenditure, government raises revenue from sources such as taxes, public debt, etc. These financial resources that fund government expenditure are raised from people.
The items of expenditure and the sources of financing them are planned by government in accordance with the objective of public welfare. Thus, government takes decisions on behalf of people with respect to how public money is to be spent under different heads of expenditures and how it is to be raised from various sources. This makes government accountable to people.
Through legislatures, parliament and various other civic bodies, people exercise their right to know as to how government is spending public money and how it is raising it from them. This accountability of government to the people of the country is manifested in the government budget. A budget is a consolidated financial statement prepared by government on expected public expenditure and public revenue during a financial year.
There are three main features of a government budget:
- It is a consolidated financial statement of expected expenditures and various sources of revenue of government.
- It relates to a financial year.
- The expenditures and the sources of revenue are planned in accordance with the declared policy objectives of government.