- Date : 29/01/2022
- Read: 4 mins
Often, when you read about the Budget, you come across terms that leave you a tad confused. Here, we simply the budget dictionary and talk about the sectors that are likely to get a boost this year.
Budget 2022 is only a few days away, and all eyes are on Finance Minister Nirmala Sitharaman's financial plan for the coming year. We are in the middle of a third wave of the pandemic, and while it is not expected to pose a big threat to the economy, it's likely to cause some hindrances. Five states will go to polls in February, and Sitharaman will make announcements keeping that in mind.
Here are the key sectors which will be in focus in the Union Budget, 2022:
- Financial services
The expectations from these sectors are high because they are important for strong and sustainable economic growth in post-pandemic India.
Also Read: How Much Does India Spend On Healthcare
The Budget lexicon
There are technical terms that you come across when reading about the Budget. We simplify them.
Annual financial statement: The Union budget, also called the annual financial statement (AFS), throws light on the expenditure and receipts of the government for a financial year. The AFS is presented before the Parliament under Article 112 of the Constitution.
The budget also gives you an outline of the government's accounts for the upcoming financial year. It needs to get a go-ahead from the Parliament, without which the government cannot make any withdrawals from the Consolidated Funds of India.
Economic Survey: Presented every year ahead of the Union Budget, the Economic Survey gives a detailed account of the Indian economy over the past year. This document is put together by a team led by the chief economic advisor.
The Economic Survey helps the common man get a better understanding of the country's economic affairs.
Inflation: Inflation is the rate of change in the prices of consumer goods and services and is expressed in percentages. If inflation outpaces income growth, then consumers' purchasing power goes down.
Fiscal policy and deficit: The fiscal policy outlines the tax and expenditure plans of the Government of India. The fiscal deficit is the overall borrowing requirement of the government when total spending exceeds revenues and includes repayments on previous years' debt.
Disinvestment: Disinvestment of government assets means the partial or complete sale of the government's stake in companies. A good example here is the sale of Air India to the Tata group.
Capital expenditure: Capital expenditure is that part of the budgeted expenses of the government that is directed toward investments such as in production machinery and infrastructure. It is different from current expenditure which goes toward payment of salaries and similar items.
Customs duty: Customs duty is a tax on goods traded across the country's borders. For example, goods purchased outside India may attract a customs duty if it is brought into the country.
Goods and service tax (GST): GST, as the name suggests, is a tax imposed on purchases of goods and services. The tax can be levied on a finished product, which is typically bought by consumers, or an intermediate one, such as raw materials that businesses buy. Whether a good or service attracts GST, and the level of the tax is determined by the GST council and fall outside the ambit of the budget.
Also Read: Are Subsidies good or bad
Direct taxes: Direct taxes primarily take the form of income taxes or corporate taxes. The budget typically frames policies surrounding them, such as income tax slabs, exemptions, and deductions. There have been instances, however, when decisions on cutting or hiking corporate taxes have been taken outside the ambit of the budget announcement.
A lot is riding on Budget 2022, especially as India aims to take economic growth to the next level.