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POLITICAL LANDSCAPE AND BUDGET CONSIDERATIONS

Why in the news?

• The upcoming Union budget is crucial due to a changed political landscape, unexpected revenue surplus, and pressing economic challenges.
• The fractured election verdict and upcoming state elections may influence budget proposals.
• The government might focus on welfare programs and social sector spending to regain narrative control.

source:slideshare

Key points: The Union Budget of India

• Since 2017-18, the Union Budget is presented on February 1.
• Previously, it was presented in late February.
• The Railway Budget merged with the General Budget in 2017-18.
• The Budget Division of the Department of Economic Affairs prepares the Union Budget.

Types of Government Budget

• Balanced Budget
  • Receipts equal expenditures.
  • Moderately increases aggregate demand.
  • Recommended near full employment.
• Surplus Budget
  • Receipts exceed expenditures.
  • Reduces aggregate demand.
  • Recommended during large inflationary gaps.
• Deficit Budget
  • Expenditures exceed receipts.
  • Increases aggregate demand.
  • Recommended during economic depression.