Written by Awdhesh Nagar
Union budget is round the corner and expected to be tabled on 1 st Feb by Finance Minister. It has impact on each one of our lives but a few understand it.
To simplify, like we set our household budget it is Government setting its own plan for income and expenses. In our household budget we allocate expenses based on income and prioritise, we keep
money for essentials, investment for future, travel and entertainment, white goods like electronics and gazettes, loan repayments.
Government also has to plan its revenue which is from Income tax, GST, Excise, custom etc. This is regular revenue but govt also gets money from sale of its investments (divestment), Dividend from RBI, Public sector undertakings.
On expenses side govt has to pay for running its establishment like govt offices, defence, security services etc. Government has to pay for social schemes like subsidy, Employment scheme (Like Narega), pension, Health schemes for citizens etc. Govt also has to fuel economic growth hence it invests in Infrastructure, Economic incentives like (manufacturing subsidy schemes), railways, education etc. Govt also invests in critical venture of national importance and security. Toady’s large Public sector like BHEL, NTPC would have not come up if govt would have not started these ventures. Without these enterprises we can’t imagine our existence. Govt has to invest in these on regular basis which is also carved from budget.
Budget normally runs in deficit means govt has more expenses than income. Shortfall is met by borrowings through Govt bonds. A huge portion of budget goes towards servicing interest of these bonds.
Since govt has limited resources by way of income and borrowing and can’t do much on running expenses like essential of our household it has to prioritise rest of expenses based on country need. So next time if you don’t get relief in income tax probably that is for need of some other national priority.
About Awdhesh Nagar
Awdhesh Nagar is experienced banking and finance professional. He has good knowledge of economics and business-related matters. He currently runs his own organisation by the name ‘financedger’ which advises more than 300 clients on their personal financial planning. Awdhesh is on mission to improve financial literacy. He considers himself responsible for financial wellbeing of his clients.In past he has worked with organisation like Citigroup, GE, Standard Chartered, SREI at senior level position. Awdhesh has also worked for ‘Jaipur Smart City’ project of Government of India’ as Financial Expert. He has handled investment, funding and project finance portfolio in these organisations.He regularly visits education institutes as guest speaker and provides his views on budget and economic events on media. Awdhesh has done his B.Com (H) from Sri Ram College of Commerce and MBA-Finance from University of Delhi.
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