Indian Economy Quiz: Union Budget and Fiscal Policy

A receipt is capital if it either creates a liability for the government or reduces an asset it holds.

It was the first union budget in India not to be printed.

The budget estimate for the fiscal deficit of the central government in 2021-22 was placed at 6.8 per cent of gross domestic product.

The Union Budget 2021-22 proposed raising the corpus of the Contingency Fund of India from five hundred crore rupees to thirty thousand crore rupees, and the change was carried through the Finance Bill of that year.

The Constitution nowhere uses the word budget. Article 112 requires the President to cause to be laid before both Houses of Parliament, in respect of every financial year, a statement of the estimated receipts and expenditure of the Government of India, and this statement is called the Annual Financial Statement.

Fiscal deficit is total expenditure minus total receipts other than borrowings, which means it measures exactly how much the government must borrow during the year to meet its planned spending.

Primary deficit equals fiscal deficit minus interest payments. Interest is the cost of borrowings made in earlier years, so removing it leaves the borrowing that the present year's policies alone make necessary.

The Fiscal Responsibility and Budget Management Act was passed by Parliament in 2003 and its rules were brought into force in 2004.

A policy cut motion asks that the amount of a demand be reduced to one rupee. The reduction is symbolic; the purpose is to record complete disapproval of the policy underlying the demand, and the member moving it may advocate an alternative policy.

It empowers the Lok Sabha to make a grant in advance, pending the completion of the procedure prescribed for voting the demands for grants and the passing of the Appropriation Act.

Fiscal policy means the use of taxation, public expenditure and public borrowing to influence output, employment and prices, and all three instruments belong to the government and are given effect through the Union Budget.