Why Union Budget 2021 is necessary: All you need to know

Sulagna D
·2-min read

The President of India, Ram Nath Kovind, will address both the Houses of Parliament regarding the Union Budget from 29th January. The Cabinet Committee on Parliamentary Affairs (CCPA) announced that the Part 1 session 2021 Union Budget discussion will happen from 29th January to 15th February. The second part of the session will take place from 8th March to 8th April.

Union Budget 2021 | Yahoo India

What exactly is the Union Budget?

According to Article 112 of India’s Constitution, the Union or Central Government drafts an ‘Annual Financial Report’ or the Union Budget every year. The document gives information regarding the entire revenue sum up of all states and the expected surplus and deficit ratio for the coming year.

The budget gathers information about the money received, money spent and the main pointers that the Houses of Parliament discuss include

-Actual financial records of the previous year.

-A rough estimate for the current year.

-A prediction for the coming year.

Also read: Quick read: Hits, misses of India's Budgets from 2010 to 2020

Why is it crucial?

  • Management

The Union budget is essential to establish a foundation for effective administration and improved work function. The plan helps to rationalise the resources appropriately and make funds available to all communities in the country’s nook and corners.

  • Reducing inequality

The budget policies help to reduce the difference between economic classes in the country. The government plans appropriate high tax collection from the rich and suitable schemes for the poor. The Yojanas, Schemes, Policies, Tax rules - everything comes under the Union Budget.

  • Prices in control

A properly drafted budget efficiently predicts any economic changes in the market. The analysis of surplus and deficit circumstances enables the government to take quick action to create economic equilibrium. The costs are moderated according to the supply conditions, and the states remain more or less stable. This became a very tough task because of the drastic economic crumble due to COVID in 2020.

  • Resource management

The government lays down the foundation to effectively transport resources from the Public and Private sectors to the citizens. The chain of supply and management remains intact and newer Policies, and Plans impact the distribution positively, as long as they are smartly framed.

Also read: Budget 2021: 6 things FM can do to give you tax relief & boost demand

The road ahead

Finance Minister Nirmala Sitharaman, already discussed the pre-budget consultations with the Heads of Industries, and the preparations to make the Budget report are in full swing. The Ministry of Affairs started the ‘Halwa Ceremony’ or the initial preparation to print the Budget documents. They are also planning to announce the Economic Survey, which comes before the 2021 Union Budget’s actual discussion.

Also read: Budget 2021: Will the FM provide relief to senior citizens this time?