It’s all about money!

You’d have heard your parents talk about the new budget and all that it has to offer. What is a budget? Why is it so important to understand what it is about? Find out how our spending and saving are controlled by this key paper.

What’s it all about

Every year, the Government presents the Union Budget. It is a national event, and is watched on television by millions of people in our country and is presented by the Finance Minister of our country.

To understand why the Budget is important, we should first understand what it is about.

The word “budget”, simply means a plan that is to be followed for a fixed amount of time. It could be a plan for a week, for a month, for six months, a year, or even ten years. The Union Budget is for one year, and so, a new Union Budget is presented every year.

It is by way of the Union Budget that people get to know how much money our country has spent and how much money has been earned. We also get to understand how the Government has spent the country’s money, and how it plans to spend it the next year.

Does it matter?

Why is it important for us to know about the budget?

It is important because, a large part of the money that belongs to the country is from its people — you and me.

Try and find out what the other taxes are.

Why do we pay taxes?

The reason we pay taxes is so that our Government can use this money to provide better facilities, like better roads and trains, better schools for the poor, better electricity in the villages and so on, and improve the lives of the people. Without paying taxes, the Government cannot do any of these things. The Budget helps us understand what the Government has used the money for, and how it will affect us.

Here is an example: Let us imagine that this Budget wants to help farmers, and decides to provide them free tractors. With the new tractors, farmers can look after their crops and plants better, and happy farmers mean more fresh food for all of us!

Another way by which we are affected is when the taxes go up and we are made to pay more for our food, petrol, gas and other needs.

In the end, the Budget will have a big impact on our day-to-day lives, and that is why we must know about it.

What? They have our money?

How is it possible for the Government to have our money?

All of us contribute, or add to the country’s money, in many ways. The one way by which we contribute the most, is by paying taxes. You may have heard the word before — on television, or maybe your parents may have spoken about it. A “tax” is the money you pay to the government in return for being able to enjoy facilities, to do something, or buy something.

For example, our parents pay taxes on the money they earn from their jobs. This tax is called “Income Tax”. When we go to a restaurant, we pay tax on the food that we eat. This tax is called “Value Added Tax”. There are many kinds of taxes that we pay to the Government, apart from these two.

A few highlights

The Union Budget for this financial year was presented on July 10, 2014.

The Finance Minister announced a change in the taxes that will be charged on certain products. As a result, shoes, computers, solar energy panels, LED light bulbs and TVs will now be cheaper!

However, fizzy drinks, juices and energy drinks will be costlier.

Rs.2,037 crores has been set aside to clean up the Ganga.

The Government has set aside Rs.500 crores to construct higher educational institutions. The Government plans to start five IITs, five IIMs, four AIIMS, two colleges dedicated to farming and agriculture, and 12 medical colleges.

The Government plans to set up a National Sports Academy.

Rs. 100 crores has been set aside to help the youth from villages to start their own businesses and become entrepreneurs.

Rs.100 crores has been set aside to help more girls go to school. (Did you know that many girls in our country are not allowed to go to school? Why is this so? Talk to your parents and teachers about this.)

“Bharat Swach Yojana” is announced to increase and improve hygiene and cleanliness in our country.

Get familiar

Talk to your parents about this year’s Budget.

Did they think it was a good budget? Why, or why not? Ask them.

Did you know?

Indira Gandhi is the only woman who has presented the Union Budget. This was in 1969.

Morarji Desai presented the Budget a record 10 times! He was also the only Finance Minister to present the budget on his birthday twice!

Dr. Manmohan Singh presented a Budget in 1991 (he was Finance Minister then) that changed many things in India, the most striking change being that foreign companies were allowed to do business in India. If you can have Pepsi or Coca-Cola today, you have Dr. Manmohan Singh to thank for!