New Delhi: With the first session of the Union Budget 2022 commencing on January 31, 2022, it is crucial to understand the intricacies of this comprehensive statement of the Union government’s receipts and expenditures presented every financial year. The Union Budget is presented to the Parliament in the form of an Annual Financial Statement and is mandated by the Constitution.
Article 112 of the Constitution mandates the Annual Financial Statement (AFS) to include the estimates of the government’s receipts and expenditures for the relevant financial year. In India, a financial year begins on April 1 and ends on March 31 in the next year. The Receipt Budget is an important document of the financial budget wherein the estimates of the receipts included in the Annual Financial Statement are further analyzed.
The document provides details of tax and non-tax revenue receipts besides capital receipts and explains the estimates of projected collection. The Receipt Budget presented by the Finance Minister to the Parliament includes the details of abstract of receipts, a summary of estimated tax, non-tax revenue, and capital receipts.
The document also provides a statement on the arrears of tax revenues and non-tax revenues, as mandated under the Fiscal Responsibility and Budget Management Rules of 2004. It also includes a statement that shows the state-wise distribution of net proceeds of union taxes and duties for the relevant financial years.
The receipt budget also includes the details of the tax revenues that were raised but were not realised. Additionally, it also includes the details of non-tax revenue and the revenue impact of the tax incentives given under the central taxation system, along with the details of sources and use of the National Small Savings Fund (NSSF).
Details of trends in tax collection
The finance minister also presents the trends in receipts, analysis of tax and non-tax revenue receipts. A statement of reconciliation between the estimates of receipts shown in the Financial Statement and Receipt Budget is also presented to the Parliament.
In addition to trends of receipts and expenditure, the details of deficits, a statement of liabilities of the government, a statement of guarantees given by the government, a statement of assets and details of external assistance are also included in the Receipts Budget. The document further includes the statement of the revenue impact of tax incentives under the central tax system which seeks to list the revenue impact of tax incentives that are proposed by the central government.
The Receipt Budget also shows the liabilities of the Government on account of securities (bonds) issued in lieu of oil and fertilizer subsidies in the past. This was earlier called Statement of Revenue Foregone and brought out as a separate statement in 2015-16 and has been merged in the Receipts Budget from 2016-17 onward.
