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6/24/13 Mrunal [Economy] Why do we need budget?

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[Economy] Why do we need budget?
The Two problems
Ask yourself a question : How does government earn the money?
Obviously, by collecting taxes from us : income tax , sales tax , customs duty and so
on
but here is the first problem:
Constitution of India says: The government cannot put any tax on us without the
passing a Law in Parliament..(Problem #1)
Anyways, All this tax money goes in the Consolidated fund of India.
When government wants to pay salaries to bureaucrats, create new (bogus)
schemes like MNREGA etc., wants to purchase new missiles and fighter
planes, it will take out money from this Consolidated fund of India.
But here is the second problem:
Constitution of India says, The government cannot take out even a single penny from this fund
without authorization from the Parliament..(Problem #2)
So, What do we conclude from Problem #1 & #2?
Government will need the permission of Parliament for to earn money and to spend
money.
Hence each year, the Finance Minister prepares two files: they have the details of
1. How government wants to earn money from citizens
2. How government wants to spend the money.
He puts these files in a leather suitcase. French word for this bag /Purse:
bougette. Thats how we got the word Budget.
You must have seen the Finance Minister holding a brown colored leather bag
and getting photographs outside the Parliament on the day of budget.
The Two files
The first file (how government wants to earn money by taxing us)
it is called Finance bill.
The second file (how government wants to spend the money)
it is called Appropriation bill
We call them Bills because they are only proposed by government and not
yet passed by the Parliament. (Just like Lokpal Bill)
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When they passed by the Parliament, and President of India signs on these
files, they become Acts.
Choice of Words
The Finance Minister does not lay down a budget in the Parliament.
He lays down the Annual financial statement. (There is no word Budget
in the whole Constitution of India: Article 112)
Same way, Parliament does not pass the budget. It passes the Appropriation
bill and the Finance Bill.
Million Dollar Question
Still remains: why do we need budget? Why did Constitution of India impose these
problems on the government?
To ensure the financial accountability of executive (Government) towards
the legislature (parliament) and by extension towards the people of India.
URL to article: http://mrunal.org/2012/03/economy-why-do-we-need-
budget.html
Posted By Mrunal On 11/03/2012 @ 17:31 In the category Economy

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