L ast week, Mr. Arun Jaitley, the country’s Finance Minister, presented the government’s Union Budget. What is the Union Budget? Just like how your parents make a budget for the family — how much money they will earn (through salaries, for instance) and plan their expenses (groceries, holidays, your school fees) accordingly — the government also needs a plan for its finances for the year ahead.
A government’s budget is similar to what your parents prepare, but on a larger scale. The government’s main source of income is the taxes employed adults pay. For instance, your parents give a part of their salaries to the government. The government also charges a tax on the things you buy. For example, if you eat at a restaurant, a percentage of the bill you pay goes to the government as a service tax or if you buy a new toothbrush, there’s a tax called the “value-added tax” that is added on to the price. The budget gives us a picture of how much we need to pay in taxes to the government in the year ahead. Once the government decides the amount to charge as tax, it submits a plan on how this money will be spent. Some of it will go into building new roads, new public hospitals and schools and some part of it will be used to help businesses get on their feet. Since the government is supposed to take care of the public’s needs by creating such facilities, it needs to present to the country a plan on how and by when it is going to do it.
Now that we know what the Union Budget is, let’s look at the most important features of this year’s plan.
Farmers
Farmers, who make sure they produce enough food for the whole nation, usually get more benefits in every budget. This year too, the government has said it will allocate R 10 lakh crore for farmers. It will also help farmers loans for which there will be 60 days of interest waiver. A dairy processing infrastructure fund will also be created with a corpus of R 2,000 crore. The corpus for irrigation has doubled since last year.
Students and youth
The government always focuses on creating better education facilities and opportunities and training programmes for young people. This year, it will introduce tests to make sure that students are learning what they need to, particularly in science. Also, some money will be spent on creating facilities for students to learn foreign languages.
Infrastructure
The government plans to spend R 1.3 lakh crore on railways, including funds for ensuring passengers’ safety, better facilities at stations and new rail lines. The government also plans to spend money on bringing internet connectivity to villages, helping companies build factories to produce electronics and for building better roads and airports.
Balancing the budget
After the government explains what it intends to spend on, it lays out a plan for where the money for these expenditures will come from. This year, the government has decided to levy a slightly higher tax rate on people who earn between Rs. 50 lakh and R 1 crore a year. However, people who earn below R 5 lakh a year will now have to pay a much lower rate of tax. The government also said it plans to introduce a new tax law, called the Goods and Services Tax, that will cut down on the several kinds of taxes we pay and change it to a much easier structure.
The budget is major economic event in the country and describes its financial position. It tells us how confident the government is about the country’s future and how confident, in turn, we must be.
