Practicing Success
India's first budget was announced in Pre-India, i.e. on April 7, 1860, when Scottish economist and politician Jawar Wilson of East India company presented it to the British Crown. However India's first Budget after independence was presented on November 26, 1947 by the finance Minister R.K. Shaumu Khan Chetty. It is also true that the first Prime Minister who has presented the Budget due to the resignation of finance Minister, is Mr. J.L Nehru. The Budget of all economy is considered as vision for nearest future as it is an annual financial statement showing otherwise estimates of expected revenue and expenditure of the Government during a financial year. In the beginning of the year, the government presented before the Lok Saba by stating its estimated receipts and expenditure. The Budget impacts the economy and society at three level (I) it promotes the aggregate fiscal discipline through controlled expenditure (II) Allocation of resources on the basis of social priorities and also (III) effective and efficient programmes for delivery of goods services to achieve maximum utility among the society. Due to economic showdown in Post-Covid environment, it is very difficult for the government to control its fiscal deficit or the expenditure are high and the present Government has targeted its financial deficit upto 16.61 Lakh crore i.e. 6.4% GDP of India for the fiscal year ended 31st March, 2023. The budget of a economy generally consists of Annual Financial Statements and demand for grants. The high fiscal deficit may cause economic failure for an economy. Therefore government tries to minimise its fiscal deficit. |
The budget surplus will increase when |
Subsidy increases Subsidy decreases Tax decreases Imports decline |
Subsidy decreases |
The correct answer is option (2) : Subsidy decreases A budget surplus occurs when government revenues exceed expenditures. To achieve a surplus, the government needs to either increase revenues or decrease expenditures. Decreasing subsidies reduces government expenditures, which can contribute to achieving or increasing a budget surplus.
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