Do you always hear about budget estimates but don’t understand what they are? Fret not! Here we will cover what they are, why they are included in the Union Budget every year and how they are calculated.
Let’s go…
1. What are budget estimates?
Every year the Union Budget allocates funds for all the ministries, departments, sectors and schemes for the entire year. These numbers are none other than 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.
2. Are these estimates final?
But these numbers are not final. As the name suggests, these are estimates of the extent of expenditure the government is willing to do. They are revised later on after the mid-year review and known as revised estimates.
3. How are they calculated?
Nonetheless, these numbers are not assigned randomly but finalised after a long process. First the ministries make an estimate of the expenditures, then the reports are discussed with the Planning Commission of India and after much consideration by the Expenditure Secretary, the budget estimates are set.
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