1. Budget Estimates
Every year during the union budget, all ministries, departments, sectors and schemes are allocated funds and these numbers are called budget estimates. For example, the government may lay out ₹1000 crore for infrastructure and so ₹1000 crore becomes the budget estimate for infrastructure for that year. Similarly, it lays out estimates for defence, railways, food subsidies, healthcare etc.
But here’s the thing.
Budget estimates are only the ‘expectation’ part of the ‘expectation v/s reality’ reel. In reality, when the actual work starts, one might need more or less money for the task. And that is when ‘Revised Estimates’ come into play.
2. Revised Estimates
A mid-year survey after the first 6 months of the financial year takes stock of how much of the allocated funds have been used, how much is left, what all activities have been planned and so on. After this, the initial budget estimates are revised and these numbers are now called revised estimates.
And unlike budget estimates, the parliament doesn’t vote on these revised estimates. However, if the revised estimates demand additional funds, then the parliament approval is required or else a re-appropriate order is needed before the revised estimates can be put to use.
3. Actuals
But then the story doesn’t end here. Budget estimates as well as revised estimates are only expectations or projections. How much money was actually utilized can only be determined when the task’s done. These final expenses can be different from the estimates and even the revisions and are available two years after the budget. They are called Actuals.
So while budget estimates and even revised estimates are the ‘expectation’ part of the ‘expectation v/s reality’ reel, actuals are the ‘reality’ part.
Now that’s a wrap but if you want to learn more about the Union Budget in a simple and easy to understand language, just follow upstox!