EVERY year as February nears, there’s much chatter about the Union Budget on every platform. If you’re a millennial, there’s a high chance that you’d dismiss the whole exercise – for being too technical and full of jargon or, worse, because you think it doesn’t affect you at all. The Union Budget, in reality, affects all of us. And it really isn’t as complicated as it’s made out to be.
In India, there are presently about 440 million millennials, which is 34 per cent of the total population. The youth in this age group are going to drive the country’s growth in the coming years, which makes it imperative for millennials to sit up and take note of the Budget.
We break down what the entire process is, and you should pay attention to it, before Budget 2022 is presented on February 1.
What is the Union Budget?
But first, let’s look at how general household budgets are made, something most of us are familiar with. Sources of income are calculated and expenditure is accordingly allocated. Similarly, the Union Budget is also essentially the statement of the Central Government’s income and expenditure for the year. It details how much money the Government expects to raise the next year and how it’s planning on allocating it among different states, departments, and sectors.
In short, it’s the annual financial report of the country. It’s presented in Parliament every year.
So it contains income and expenses only for the year to come?
No. Three different kinds of figures are presented.
The Union budget gives the statement of receipts and expenditure of three consecutive years:
1) Actuals for the last financial year
2) Estimates for the present year, which is 2022-23 in this case
3) Estimates for the upcoming year, referring to 2023 here
The budget department consolidates these figures and prepares the final document.
Who prepares this Union Budget?
The Budget affects over a billion people and so the Central Government can’t really do it alone. The Government’s think tank NITI Aayog, different spending ministries and the Finance Ministry come together to finalise the document.
The Budget Division of the Department of Economic Affairs inside the Finance Ministry is the main body responsible for it.
Why is the Budget important?
Article 112 of the Constitution of India mandates that the government bring out an annual financial report.
The main objective of the Budget is to plan for the economic growth of the country, while maintaining social justice and equality. Some of the key things the budget usually looks at are:
- Efficient allocation of resources
- Reducing poverty and unemployment levels
- Reduce economic inequality
- Resource management
- Changing tax structures
For any individual living in the country, the Budget proposes changes to things that affect everyday life, like what will become costlier and cheaper, how much tax one will have to pay and more.
Two parts of the Budget speech
The Finance Minister’s Budget speech usually has two sections – Part A and Part B.
Part A presents the general economic survey of India and other policy statements. Part B deals with tax proposals.
Now that you’ve understood what the Budget is, let’s take a look at some of the common things millennials might be most interested in.
Some things that may feature in this Budget that may interest you
Budding entrepreneurs hope for government support and the Budget comes into play here. With several companies filing for IPOs in 2021, we’re yet to see how the startup landscape plays out in 2022.
The younger generation forms a sizable chunk of crypto investors. About 20 million people in the country jumped on the crypto bandwagon in 2021. At present, Indians hold crypto assets worth $5.3 billion.
Given the warnings from several quarters of how much doom we’re headed for at present levels of carbon emission, the Budget plays an important role in implementing environment-friendly policies. Electric vehicles and more could be a talking point in the Budget.
With a lot of millennials being in the taxable bracket, whether the Government increases tax benefits will be something to watch out for. This year, there has been talks over whether the Budget will increase the limit on section 80C tax deductions to Rs 5 lakh from the existing Rs 1.5 lakh.
Education remains one of the main areas of expenditure for the youth, and any tax benefits or other such benefits is likely to help millennials considerably.
There are several other major areas of fund allocations that are eagerly watched out for. These include defence, railways, industries and agriculture. Announcements on these fronts determine how developments and projects will proceed in these sectors.