Union Budget & Economic Survey — Analysis Guide

What is the Union Budget?

The Union Budget is the annual financial statement of the Government of India (Article 112 of the Constitution). Presented on February 1 each year by the Finance Minister.

Budget Structure

Receipts (Income)

CAPITAL RECEIPTS (one-time, create liabilities)
    ├── Borrowings (Market loans, T-bills, external borrowings)
    ├── Disinvestment proceeds
    └── Recovery of loans

REVENUE RECEIPTS (regular income, no liability)
    ├── Tax Revenue
    │   ├── Direct Taxes: Income Tax, Corporate Tax, STT, CTT
    │   └── Indirect Taxes: GST, Customs, Excise (legacy)
    └── Non-Tax Revenue
        ├── Interest receipts (loans to states, PSUs)
        ├── Dividends (PSUs, RBI)
        ├── Fees, fines, grants
        └── External grants

Expenditure

CAPITAL EXPENDITURE (creates assets)
    ├── Infrastructure: Roads, Railways, Ports, Airports
    ├── Defence equipment, ships, aircraft
    ├── Capital grants to states (for asset creation)
    └── Loans to states and PSUs

REVENUE EXPENDITURE (regular, recurring)
    ├── Interest payments (largest single item, ~20% of total expenditure)
    ├── Defence revenue (salaries, maintenance)
    ├── Subsidies (Food, Fertiliser, Fuel, LPG)
    ├── Pensions (civil + defence)
    ├── Central Sector Schemes
    └── Salaries, establishment costs

Key Fiscal Terms

Fiscal Deficit: Total Expenditure − Revenue Receipts − Non-debt Capital Receipts

•Government borrows to fill this gap

•FY2024-25 target: 4.9% of GDP

•FRBM Act target: 3% of GDP (deferred due to COVID)

Revenue Deficit: Revenue Expenditure − Revenue Receipts

•Measures current consumption spending vs current income

•Positive RD = government borrowing for consumption (bad)

Primary Deficit: Fiscal Deficit − Interest Payments

•Measures current deficit excluding legacy interest burden

Capital Expenditure (Capex): Government investment in physical assets

•FY2025 Budget: ₹11.11 lakh crore (3.4% of GDP)

•Capex multiplier: ₹1 of government capex generates ₹2–3 GDP growth

Economic Survey

Published by Ministry of Finance (Chief Economic Adviser's office) a day before the Budget.

What it covers:

•India's economic performance — GDP growth, inflation, fiscal position

•Global economic outlook and its impact on India

•Thematic chapters on key economic issues

•Policy recommendations

**Key 2023-24 Economic Survey fin

Union Budget & Economic Survey — Fundamentals