What are we going to get in this budget? People want straight and simple answers. It is not difficult to make a close-to-accurate guess if one first addresses some key questions. What is a budget? Who are its architects? Which segment of people ~ poor, rich, middle classes, employed, unemployed, farmers, gig workers, etc. is seeking answers? First things first. The budget is the government’s estimated income and expenditure for the financial year ~ a financial statement.

It is a constitutional requirement (as detailed under Articles 112, 114, 266, 266(2), and 270) of the executive to take the approval of the legislature, in other words of the people through their elected representatives in Lok Sabha to spend their money from the Consolidated fund of India. The budget not only deals with income and expenditure estimates for the budget year but provides the space to the government to announce related decisions, policies, programmes, taxes and concessions, etc.

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It allocates money for various purposes including expenditure on salary and allowances to its own employees, armed forces et al. It earmarks spending on other essential items like interest payment on borrowed money, allocations to states and union territories of their tax share, grants etc. Then the government proposes spending in various other areas like health, education and other social sector components and subsidies. All this suggests that the allocations to various sectors would be commensurate with the size of the budget, in other words higher the budget size, higher would be allocations for the people’s welfare.

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Unfortunately, the size of the Union budget as a percentage of the GDP has been shrinking over the years; it has come down from 17.43 per cent of the GDP in 2009-10 to 14.76 per cent in 2024-25. The upcoming budget is not going to be different given the government’s excess concern with fiscal consolidation and lower-than-expected GDP growth. We can make a rough estimate of the size of the budget taking the expected GDP in 2025- 26. The GDP was estimated at Rs. 326 lac crore in the 2024-25 budget; later it was brought down to Rs. 324 lac crore with no........

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