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1. Ankush Sinha – 030104028.2. Avishekh Gupta - 030104052.3. Debraj Sinha – 030104036.4. Divya Prakash Gupta - 030104007.5. Gunjan Khandelwal- 030104044.6. Joydeep Bakshi – 030104026.7. Rishika Bhotika- 030104029.8. Saloni Buaria- 030104037.

Analysis Of Union Budget 2015-2016

Guided by:Prof. Sangita Dutta Gupta

A budget is a financial document used to project future income and expenses. The budgeting process may be carried out by individuals or by companies to estimate whether the person/company can continue to operate with its projected income and expenses.

A Budget is a tool to help you understand where your money goes.

A Budget allows you to decide how much and when you spend your income.

A Budget allows you to make and reach your financial goals.

A Budget is the cornerstone of a solid financial future.

What is a Budget ?

What is Union Budget ?

According to Article 112 of the Indian Constitution, the Union Budget of a year, also referred to as the annual financial statement, is a statement of the estimated receipts and expenditure of the government for that particular year.

The fiscal year runs from 1st April to 31st March.

Union Budget is classified into Revenue Budget and Capital Budget.

Revenue budget includes the government's revenue receipts and expenditure.

Capital Budget includes capital receipts and payments of the government.

Fiscal deficit is incurred when the government's total expenditure exceeds its total revenue.

COMPONENTS OF BUDGET Revenue Receiptsa) Tax revenue b) Non-tax revenue

Capital receiptsa) Recovery of loan and other receipts b) Borrowingsc) Other liabilities

Revenue Expenditure Capital Expenditure

Direct Taxes : A tax that is paid directly by an individual or organization to the imposing entity.

A taxpayer pays a direct tax to a government for different purposes.

Components : 1. Corporate Tax Rs. 4,70,000 Cr. (2015).

Rs. 4,51,000 Cr.(2014).

2. Personal/ Individual Tax Rs. 3,27,000 Cr. (2015).

Rs. 2,84,000 Cr. (2014).

Indirect Tax

Custom Duty (2,08,000 cr.)

Central Excise

(2,30,000 cr.)

Service tax

(2,10,000 cr.)

Total Indirect tax Total Direct tax Union territory Total T/f to State

2015 : 648000 cr. 797000 cr. 4000 cr. 14,49,000 5,23000 cr. 2014 : 624000 cr. 736000 cr. 3401 cr. 13,63,401 38,7732 cr.

Non-Tax Revenue: Public income received through the administration, commercial enterprises,

gifts and grants are the source of non-tax revenues of the government.

This amounted to Rs. 2,21,000 Cr.

Components:

(i) Administrative revenue

(ii) Profit from state enterprises

(iii) Gifts and grants

Calculation Of Total Revenue:

Non tax Revenue = 221000 cr. 58% of total tax rev. = 936000cr.

Recovery of Bad debt = 75000 cr.

Total Receipt of Central Govt.

(2015) 12,22,000 cr. (2014) 11,67,131 cr. Difference = 54,869 cr.

EXPENDITURE

NON-PLANNED

YEAR 2015-2016

13,12,000

PLANNED

YEAR 2014-2015

5,75,000

YEAR 2015-2016

4,65,000

Non-planned expenditure Sectors Amount (cr)

1.Interest 4,50,000 2.Defence 2,46,000 3.Subsidies 2,44,000 4.Grants to States 1,08,000 5.Pension Fund 88,000 6.Police Expense 51,000 7.Social Service Expense 31,000 8.Economic Service Expense 30,000 9.General Service Expense 29,000 10.Miscellaneous Service Expense- 29,000

Total = 13,12,000

Fiscal Deficit Trends

India recorded a Government Budget deficit equal to 4.50 percent of the country's Gross Domestic Product in the fiscal year 2013/2014.

Government Budget in India averaged -3.87 Percent of GDP from 1991 until 2014

reaching an all time high of -2.04 Percent of GDP in 1997 and a record low of -7.80 Percent of GDP in 2009.

Reasons for Fiscal deficit

Increase in Subsidies

Payment of Interest

Defense Expenditure

Poor Performance of Public Sector

Tax Evasion

Weak Revenue Mobilization

Huge Borrowings

Unproductive expenditure by the

government

Government Budget Forecast

In 2016, the Government Budget is expected to increase to -3.90 percent of GDP. In the long-term, the Government Budget in India is projected to trend around -3.50 and -3.06 percent of GDP in the years of 2020 and 2030 respectively.

India Government Budget Forecasts are projected using an autoregressive integrated moving average (ARIMA) model 

Indian Govt. Budget V/S Others

Countries Government Budget Reference Previous Highest Lowest Unit

Australia -3.1 14-Jun -1.2 2 -4.2 percent of GDP

Brazil 1.6 13-Dec 2 2.8 0.8 percent of GDP

China -2.1 14-Dec -2.1 0.58 -3.05 percent of GDP

France -4.1 13-Dec -4.9 -1.5 -7.5 percent of GDP

India -4.5 14-Mar -4.9 -2.04 -7.8 percent of GDP

Indonesia -2.3 13-Dec -1.9 3.02 -2.5 percent of GDP

Japan -7.6 13-Dec -9.2 2.58 -9.2 percent of GDP

Russia -0.5 14-Dec -0.5 9.88 -7.9 percent of GDP

United Kingdom -5.8 13-Dec -6.1 3.6 -11.4 percent of GDP

United States -2.8 14-Sep -4.1 4.6 -12.1 percent of GDP

Taxation

Abolition of Wealth Tax. No change in tax slabs. Service tax increased to 14 per cent. Total exemption of up to Rs. 4,44,200 can be achieved. Rate of corporate tax to be reduced to 25% over next four years. 100% exemption for contribution to Swachh Bharat, apart from CSR. Additional 2% surcharge for the super-rich with taxable income of

over Rs. 1 crore.

INFRASTRUCTURE

Rs. 70,000 cr to Infrastructure sector. Tax-free bonds for projects in rail road and irrigation. Atal Innovation Mission to be established to draw on expertise of

entrepreneurs, and researchers to foster scientific innovations; allocation of Rs. 150 cr.

Govt. proposes to set up 5 ultra-mega power projects, each of 4000MW.

PPP model for infrastructure development to be revitalized and government to bear majority of the risk.

Agriculture Rs. 25,000 cr for Rural Infrastructure Development Bank. Rs. 5,300 cr to support Micro Irrigation Programme. Farmers credit - target of 8.5 cr.

Education Expenditure on the education sector Rs. 17,000cr. New IIMs & IITs to come up in various states.

Defence Allocation of Rs. 2,46,726 cr; an increase of 9.87 per cent over last year. Focus on Make in India for quick manufacturing of Defence equipment.

Development schemes for old monuments. Visa on Arrival for 150 countries.

Gold Initiated Gold Monetisation Scheme.

Welfare Schemes Housing for all by 2020. GST & JAM Trinity. 6Crores toilets across country. Refinancing by Mudra Bank. Rs 5000 Crore additional allocation for MGNREGA.

Tourism

Recommendations Individual Tax should be reduced.

Investments in the area of planned expenditure should have been more than non-planned expenditure.

Education sector should have not been ignored.

Government should have concentrated more on domestic need/market rather than International market.

Abolishment of wealth tax should not be carried on for a longer period of time.

Gold monetization can help to grow the economy of our country.

References http://economictimes.indiatimes.com/definition/Union-Budget

http://www.tradingeconomics.com/india/government-budget/forecast

Seminar at “The Bengal Club”.