Fiscal Policy & Revenue (Part – II)

As per the Budget Estimates 2010-11 option (b) was the  correct answer. According to Interim Budget Estimates 202 25 the allocations for the given sectors are as follows: Energy (Rs. 76302 cr.), Social Welfare (Rs. 56501 cr.), Transport (Rs. 544039 cr.) and Rural Development (Rs. 265808 cг.).

In the Union Budget 2023-24 and the Interim Union Budget 2024-25, the share of given items in total outlay (in%) is as follows:

As per the question year and also at present, option (b) is the correct answer. As per the Interim Union Budget Estimates 2024-25, the total receipts are estimated at Rs. 4765768 crore, in which total revenue receipts and capital receipts are Rs. 3001275 crore (62.98%) and Rs. 1764494 (37.02%) crore respectively. So, the capital receipts are less than the revenue receipts.

Income tax, public borrowings and VAT (Value Added Tax) are the sources of public revenue, while subsidy is a part of public expenditure

The current or revenue account of the government includes all the revenue receipts (also known as current receipts) of the government income which cannot be reclaimed back from the government. The tax and non-tax revenue receipts consist of corporation tax, taxes on income, customs, GST, Union excise duties, dividends and profits from public enterprises etc. All those receipts of the government which either creates liability or reduces financial asset are capital receipts. Sale of National Saving Certificates and loans received from the World Bank are included in capital receipts and hence, they are part of capital account of the budget.

Interest receipts, tax receipts and profits and dividends of Government Departments and Public Undertakings are included in the revenue account of Union Budget while securities issued against small savings is included under debt receipts in the capital account of Union Budget.

Capital Budget consists of capital receipts and capital payments. The capital receipts are loans raised by the Government from public, called market loans, borrowings by the Government from Reserve Bank and other parties through the sale of Treasury Bills, loans received from foreign governments and bodies, disinvestment receipts and recoveries of loans from State and Union Territory Governments and other parties. Capital payments consist of capital expenditure on acquisition of assets like land, buildings, machinery, equipment, as also investments in shares, etc., and loans and advances granted by Central Government to State and Union Territory Governments, government companies, corporations and other parties. Capital Budget also incorporates transactions in the Public Account (including small savings).

Earlier (before Union Budget 2017-18) in the budget estimates, there was plan and non-plan classification of the Government's expenditure. Non-Plan expenditure of the Government consisted of subsidies, interest payments, defence services expenditure, maintenance expenditure for the infrastructure created in the previous plans, salaries and pensions payments, statutory transfers to the States and U.T. Governments etc. While all expenditure done in the name of planning (i.e. Five Year Plans) were called Plan Expenditure. Budget 2017-18 brought 3 major reforms. First, presentation of Budget advanced to 1" February to enable the Ministries to operationalise all activities from the commencement of the financial year. Second, merger of Railway Budget with the General Budget and third, removal of Plan and Non-Plan classification of expenditure.

Earlier (before Union Budget 2017-18) in the budget estimates, there was plan and non-plan classification of the Government's expenditure. Non-Plan expenditure of the Government consisted of subsidies, interest payments, defence services expenditure, maintenance expenditure for the infrastructure created in the previous plans, salaries and pensions payments, statutory transfers to the States and U.T. Governments etc. While all expenditure done in the name of planning (i.e. Five Year Plans) were called Plan Expenditure. Budget 2017-18 brought 3 major reforms. First, presentation of Budget advanced to 1" February to enable the Ministries to operationalise all activities from the commencement of the financial year. Second, merger of Railway Budget with the General Budget and third, removal of Plan and Non-Plan classification of expenditure.