Understanding Budget Terminology(Part 1)

What is a Budget?

The Union Budget is a statement of revenues and expenditures for the coming fiscal year, i.e. , the one that starts on 1 April of the year.

What does the budget consist of?

Take a look at the graphic titled 'Union Budget at a Glance', probably the best document to understand the components of the various types of figures in the Budget.

The Interim Budget of 2019-20 consists of the following:
(a) Actuals for 2017-18
(b) Budget Estimates for 2018-19
(c) Revised Estimates for 2018-19
(d) Budget Estimates for 2019-20

The Actuals for 2017-18 may be represented as such but they still would be PROVISIONAL only. This means that these figures are not the final figures for 2017-18, but are subject to further revision. In fact , the final figures for 2017-18 will be only available toward the end of Financial year 2018-19.

Budget Estimates (BE) relate to the figures which the Finance Minister set out in his Budget Speech last year(i.e. , on 1 Feb 2018) for the Financila year 2018-19.

However, all figures - related to revenue collection, expenditure, other allocations - are subject to change. These numbers are more ESTIMATES and not actuals. As the year progresses, such figures may sometimes need to be revised. For example, if there is low industrial and agricultural activity(meaning lower economic output) , tax collections may dip. This in turn, will reduce the government's Revenue Receipts.

In such case, the central government may revise the Budget Estimates (made in the Budget). Such altered figures are labeled Revised Estimates (RE). These RE are listed in the third coloumn.

In the fourth column, you will find Budget Estimates for FInancial year 2019-20. These figures reflect the various estimates made by the government in terms of Receipts(including tax collections ) and Expenditures(including interest payments and salary payments to government employees).