Q. Consider the following statements with reference to the budget:
1. The budget document also contains the ways and means to raise the revenue.
2. The term ‘budget’ is not mentioned in the Constitution.
3. The Parliament can reduce, abolish or increase a tax.
How many statements given above are correct?
Exp) Option b is the correct answer.
The Constitution refers to the budget as the ‘annual financial statement’. It has been dealt with in Article 112 of the Constitution. The budget is a statement of the estimated receipts and expenditure of the Government of India in a particular financial year, which begins on 1 April and ends on 31 March of the following year.
Statement 1 is correct. In addition to the estimates of receipts and expenditure, the budget contains certain other elements like,
- Estimates of revenue and capital receipts;
- Ways and means to raise the revenue;
- Estimates of expenditure;
- Details of the actual receipts and expenditure of the closing financial year and the reasons for any deficit or surplus in that year; and
- Economic and financial policy of the coming year, that is, taxation proposals, prospects of revenue, spending programme and introduction of new schemes/projects.
Statement 2 is correct. The term ‘budget’ has nowhere been mentioned in the Constitution. It is mentioned as ‘Annual financial statement’ in article 112.
Statement 3 is incorrect. It is the Parliament that can reduce or abolish a tax but cannot increase it.
