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                               What is Union budget

A Union budget is an estimation of revenue and expenditure of the Central government over a specified period of time and is usually compile present, past and future financial years.

Definition of Budget

In simple words, budget is an estimate of income and expenditure for a definite duration.In economics, budget is a systematic list of revenue and expenditure or we can say its a plan for the income and expenditure. 

The word ‘budget’ has been borrowed from the English word "Bowgette" which traces its origin from the French word “Bougette”.  Word “Bougette” has arrived from the word, ‘Bouge’ which means a leather bag 

Why the Government works out a budget every year?

The Government performs two important functions by making budget every year-

1. The Government estimates the expected expenditures for developmental works in different sectors of the economy e.g. Industry, Manufacturing, Education, Health, Transport etc.

2. To meet the expenditures for the coming financial year, the Government tries to work out the sources of revenue. ( i.e. by imposing  new taxes or increasing or decreasing the previous rates of taxations, or to remove or impose subsidy on any commodity.

In other words, the Governments decide about the expenditure to be incurred on which commodities primarily and how the money is going to be arranged for these expenditures. The details of such income and expenditures statements are known as ‘Budget’. Each budget is made for a specified duration.  More