Government Budget

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Notes

Government Budget :
Budget is an important instrument of financial administration through which all the financial affairs of the state are regulated. Budget is a financial statement showing the expected receipts and proposed expenditures of the government in the coming financial year. In India, a financial year is from 1st April to 31st March. Article 112 of the Constitution of India has a provision for annual financial statement. In every budget, a set of seven budget documents describe the details of 
Government finance in India.
The word ‘Budget’ is derived from the French word ‘Bougette’,which means a bag or a wallet containing the financial proposals. These financial proposals are in the form of the Government expenditure and revenue.
Central Budget provisions are divided into:
1) Revenue Budget 
2) Capital Budget.
1) Revenue Budget :
It consists of revenue receipts and revenue expenditure of the government. Revenue receipts are divided into tax and non-tax revenue. Revenue expenditure comprises of interest paid on Government borrowings, subsidies and grants given to the state governments.
2) Capital Budget :
The capital budget consists of capital receipts and capital payments. Capital receipts are Government loans raised from the public and the Reserve Bank of India, divestment of equity holding in the public sector enterprises, loans received from the foreign Governments and other foreign bodies, State deposit funds, special deposits etc
Capital payments refer to the capital expenditures on various development projects, investments by the Government, loans given to the state Governments, and Government companies, corporations and other parties. Besides, it includes expenditure on social and community development, defence and general services.

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