Budget Basic Question Ans Answer
Categories: Education
1. What do you understand by the term ‘Budget’ and why do we need a Budget? Ans: Budget is the annual financial statement of the estimated receipts and expenditure of the government for the particular year. It is a legal document because the legislature passes it and the President approves it. The prime motive of Government financial management is to determine how adequately the financial and resource management responsibilities have been discharged. 2. How the budget is prepared in India? Ans: The budget is prepared in India through the following six stages in the Parliament: 1. Presentation of Budget 2. General Discussion 3. Scrutiny by departmental committees 4. Voting on Demands for grants 5. Passing of appropriation bill 6. Passing of finance bill. 3. What is Financial Bill? Ans: Finance Bill is a Money Bill as defined in Article 110 of the Constitution. It is proposals of the government for levy of new taxes, modification of the existing tax structure or continuance of the existing tax structure beyond the period approved by Parliament are submitted to Parliament through this bill. 4. What is the 'Rules of Procedure and Conduct of Business in the Lok Sabha for the presentation Budget? Ans: According to Article 204(1) of Rules of Procedure and Conduct of Business in the Lok Sabha, the Budget is presented on the day as fixed by the President of India. Usually, it is presented at 11 am on the last working day of February about a month before the beginning of the financial year. 5. What is the role of the Vote on Account while presenting the budget? Ans: Vote-on-account refers to a vote on the accounts of the government. Usually, the annual budget is presented by the end of February after which it is discussed — details of the budget are scrutinized by a Parliamentary committee and it is finally passed by mid-May. It is taken whereby a government gets parliamentary approval to run the government for a few months, using funds drawn from the Consolidated Fund of India. 6. Explain the objective of GAAR (General Anti-Avoidance Rule) which is implemented from 1 April 2017? Ans: GAAR (General Anti-Avoidance Rules) is a tool for checking aggressive tax planning especially that transaction or business arrangement which is/are entered into with the objective of avoiding tax. It is proposed by the then Union Finance Minister Pranab Mukherjee during the annual budget 2012-13- is anti-tax avoidance rule, drafted by the Union Government of India, which prevents tax evaders, from routing investments through tax havens like Mauritius, Luxemburg, Switzerland. 7. Explain the term “Interim Budget”? Ans: Interim budget is a complete set of accounts, including both expenditure and receipts. It also can be presented by all governments whether incumbent or regular or caretaker, however, the Interim Budget becomes of special importance when the elections are underway and a caretaker government is in place. It can also be presented when a new Government has recently been sworn in. 8. What are the legal provisions underlying the budgetary process? Ans: The legal provision underlying the budgetary process is discussed below: Article 112 in The Constitution of India envisages under article 112 for the creation of the Annual financial statement. The President shall in respect of every financial year cause to be laid before both the Houses of Parliament a statement of the estimated receipts and expenditure of the Government of India for that year, in this Part referred to as the annual financial statement. The estimates of expenditure embodied in the annual financial statement shall show separately. Then Rules 204—221 and 331-E of the Rules of Procedure and Conduct of Business in the Lok Sabha and lastly validated by the Direction 19-B of Directions the Speaker. 9. What is Money Bill? Ans: The Constitution of India enshrine under Article 110 (1) that when a Bill is deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters: the imposition, abolition, remission, alteration or regulation of any tax; regulation of borrowing by the government; custody of the Consolidated Fund or Contingency Fund of India, and payments into or withdrawals from these Funds; appropriation of money out of the Consolidated Fund of India; declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure; receipt of money on account of the Consolidated Fund of India or the public account of India or the custody or issue of such money or the audit of the accounts of the Union or of a State. 10. What are the components of the Budget? Ans: There are 14 components of the Budget which are given below: 1. Annual Financial Statement 2. Demands for Grants 3. Receipts Budget 4. Expenditure Budget Volume 1 5. Expenditure Budget Volume 2 6. Finance Bill 7. Appropriation Bill 8. Memorandum explaining the provisions in the Finance Bill 9. Budget at a Glance 10. Highlights of the Budget 11. Macro-economic policy framework for the relevant financial year 12. Fiscal Policy Strategy Statement for the financial year 13. Medium-term Fiscal Policy Statement 14. Medium-term Expenditure Framework Statement