What is a Revenue Budget

A revenue budget refers to the financial plan laid out by the government that outlines the expected inflows of funds or income and the proposed expenditure for the upcoming fiscal year. It is a key component of the Union Budget presented by the Government of India. The revenue budget in India primarily focuses on the revenue side of the government’s finances, including both the expected revenue receipts and the proposed revenue expenditures. It encompasses various sources of revenue for the government, such as taxes, duties, fees, and non-tax revenue.

What are the components of revenue budget?

The revenue receipts of the revenue budget includes,

Tax Revenue – Revenue from income tax, corporate tax, goods and services tax (GST), customs duties, excise duties, and other taxes levied by the central government.

Non-Tax Revenue – It comprises revenue generated from non-tax sources, such as dividends from public sector enterprises, interest receipts, profits from the Reserve Bank of India, and other miscellaneous sources.

On the expenditure side, the revenue budget outlines the proposed allocation of funds for various sectors and government activities, including salaries and pensions of government employees, subsidies, interest payments on loans, defense expenses, social welfare schemes, infrastructure development, and other administrative expenses.

Why is the revenue budget important?

The revenue budget is important because it allows for effective financial planning, control, resource allocation, performance evaluation, fiscal discipline, and goal achievement. It provides a roadmap for allocating resources, monitoring financial performance, and making informed decisions. It ensures transparency, accountability, and responsible financial management.