India Budget 2024: A Complete guide on How To Read Budget

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Whenever the government releases the India Budget, people start finding about it.

Here we have created a complete easy to understand guide on India Budget so that everyone can understand it, what is India Budget, Importance, Types, Key points, How to read India Budget and Understand how it is importance for India and your life etc.

We have created it with lot of research. If you get it easy and useful then please do share with your friends and family.

India Budget: Definition, History, Rules and Importance

The Union Budget of India, also known as the Annual Financial Statement, is a yearly plan set by the Ministry of Finance for the Republic of India.

It outlines how the government will spend and earn money in the upcoming year, predicting economic conditions based on government policies.

The Indian budget dates back to the Mughal era when emperors estimated income and expenses.

During British rule, the first public budget was presented in 1860 by Finance Minister James Wilson. Since then, it’s an annual presentation in February to the Parliament.

The rules for the Indian budget are in the Constitution and Government of India (Transaction of Business) Rules, 1961.

It’s divided into two parts:

  • Part A: This part contains the revenue estimates of the government.
  • Part B: This part contains the expenditure estimates of the government.

The budget is presented in Hindi and English, with the Finance Minister’s speech translated into regional languages.


The Indian budget guides the country’s economic policy for the next year. Investors, businesses, and individuals use it to make decisions. It also impacts everyday life, influencing prices, job availability, and government services.

  • Focus on development: Allocates funds for programs like infrastructure, education, and healthcare.
  • Fiscal consolidation: Aims to reduce the fiscal deficit, the difference between government revenue and expenditure.
  • Social welfare: Allocates funds for programs like poverty alleviation and social security.

Understanding Interim and Union Budget

Both Interim and Union Budgets are financial plans presented by the Indian government, but they serve different purposes. Here’s a simple breakdown:

Union Budget:

  • Frequency: Annually, usually on the last working day of February.
  • Timeframe: Covers the entire financial year (April 1st to March 31st).
  • Contents: Comprehensive plan for government revenue, spending, and economic policies.
  • Key Features: Introduces new schemes, reforms, and policies.
  • Approval: Subject to detailed discussion and approval by both houses of Parliament.
  • Example: The upcoming Budget on February 1st, 2024.

Interim Budget:

  • Occasion: Presented only before general elections when there’s not enough time for a full budget by the outgoing government.
  • Duration: Covers a short period, usually 2-4 months, until the new government presents its full budget.
  • Contents: Focuses on essential expenses, ongoing schemes, and urgent requirements without major policy changes.
  • Scope: Limited detail on revenue estimates and avoids major structural changes.
  • Approval: Undergoes less scrutiny and debate compared to the Union Budget.
  • Example: Interim Budget 1st February 2024.

Key Differences:

FeatureUnion BudgetInterim Budget
PurposeFull-year financial planTemporary measure before general election
DurationFull financial year
(April 1st to March 31st)
Short period (2-4 months)
ContentsComprehensive with new policiesLimited, focuses on essential expenses
ApprovalDetailed discussion and approvalLess scrutiny and debate


  • Union Budget is the regular, annual financial plan.
  • Interim Budget is a temporary measure before elections.

I hope this helps clear up the distinctions between the two! Feel free to ask if you have more questions.

Components Of India Budget

The budget of India is a comprehensive financial statement that outlines the government’s revenue, expenditure, and fiscal policies for a specific fiscal year.

The budget is presented annually by the Finance Minister in Parliament.

It consists of two main components:

  • Revenue Budget
  • Capital Budget

Revenue Budget:

Revenue Receipts:

This includes the government’s earnings through taxes, duties, and non-tax sources.

It comprises items like income tax, corporate tax, excise duty, customs duty, and non-tax revenue like dividends and profits from public sector enterprises.

You can understand revenue receipts with the data of Union Budget 2023-24

  • Tax Revenue: Increased by 11.7% compared to 2022-23, with income tax contributing the most (Rs. 7.74 lakh crore).
  • Non-Tax Revenue: Increased by 8.8% compared to 2022-23, including dividends from public sector enterprises and spectrum auction proceeds.

Revenue Expenditure:

This part covers the day-to-day operational expenses of the government, such as salaries, subsidies, interest payments, pensions, and grants.

You can understand revenue expenditure with the data of Union Budget 2023-24

  • Salaries: Rs. 3.01 lakh crore allocated for central government employees’ salaries.
  • Subsidies: Rs. 3.39 lakh crore allocated for various subsidies, including food, fertilizers, and fuel.
  • Interest Payments: Rs. 7.92 lakh crore allocated for interest payments on past borrowings.

Capital Budget:

Capital Receipts:

This includes the government’s borrowings, disinvestment proceeds, and other capital receipts. Borrowings can be from domestic or external sources.

You can understand capital receipts with the data of Union Budget 2023-24

  • Gross Market Borrowings: Rs. 15.4 lakh crore planned borrowing from the market through dated securities to finance the fiscal deficit.
  • Disinvestment Proceeds: Rs. 65,000 crore targeted from selling government stake in public sector enterprises.

Capital Expenditure:

This pertains to the creation of long-term assets and includes investments in infrastructure, acquisition of assets, loans to state governments, and contributions to funds for specific purposes.

You can understand capital expenditure with the data of Union Budget 2023-24

  • Infrastructure: Rs. 9.06 lakh crore allocated for infrastructure development, including roads, railways, and urban transport.
  • Defense: Rs. 5.25 lakh crore allocated for defense capital procurement and infrastructure development.

Other Aspects In Union Budget

In addition to these components, the budget document provides information on various other aspects, such as:

Fiscal Deficit:

It is the difference between the government’s total expenditure and its total revenue (excluding money from borrowings).

It indicates the borrowing requirements of the government.

Projected at 5.9% of GDP, a slight decrease from 6.4% in 2022-23.

Revenue Deficit:

This is the difference between revenue expenditure and revenue receipts. It signifies the shortfall in meeting the day-to-day expenses using revenue receipts.

Expected to be 2.9% of GDP, showing improvement from 4.1% in 2022-23.

Primary Deficit:

It is the fiscal deficit minus the interest payments on past borrowings. It provides a measure of the government’s fiscal discipline, excluding the impact of interest payments.

Plan and Non-Plan Expenditure:

The budget used to categorize expenditure into plan and non-plan components.

Plan expenditure is related to programs and schemes, while non-plan expenditure includes the government’s regular operational expenses.

This distinction has been discontinued since 2017-18.

Budgetary Allocation to Ministries/Departments:

The budget details the allocation of funds to various ministries and departments for their functioning and specific schemes.

The Ministry of Railways received the highest allocation (Rs. 2.40 lakh crore), followed by Defense and Education.

Budget Estimates and Revised Estimates:

The budget provides both initial estimates and revised estimates, allowing for a comparison between planned and actual expenditure and revenue.

Complete Steps On How To Read India Budget 2024

We have break down the steps on How to read the India Budget 2024. Here we have used the Interim Budget 2024-25 which is released on 1st February.

Step1. Understanding the Structure:

  • Part A (Economic Survey): As of today, the Economic Survey isn’t publicly available yet. It’s typically released a day before the budget presentation. Keep an eye out for its release on the official website:
  • Part B (Union Budget): This includes the Budget Speech, Annual Financial Statement, and other associated documents. You can access these on the same website.

Step2. Analyzing Key Figures:

  • Total Expenditure: ₹ 42.23 lakh crore (as per Budget Speech)
  • Total Revenue: ₹ 40.53 lakh crore (as per Budget Speech)
  • Fiscal Deficit: ₹ 1.70 lakh crore (3.8% of GDP)
  • Revenue Deficit: ₹ 9.08 lakh crore (2.1% of GDP)

Step3. Breaking Down Revenue and Expenditure:

  • Revenue Components:
    • Tax Revenue (62.9%): Explore direct taxes (income tax, corporate tax), indirect taxes (GST, customs), and other taxes.
    • Non-Tax Revenue (25.6%): Includes disinvestment proceeds, dividends, and other receipts.
    • Capital Receipts (11.5%): Loans, borrowings, and other capital sources.
  • Expenditure Components:
    • Revenue Expenditure (79.5%): Covers day-to-day administrative expenses, salaries, subsidies, etc.
    • Capital Expenditure (20.5%): Investments in infrastructure, defense, and other assets.

Step4. Examining Revenue Sources:

  • Analyze trends and changes in different tax and non-tax revenue sources compared to the previous budget and pre-budget estimates.
  • Identify specific sectors contributing more or less to total revenue.

Step5. Reviewing Expenditure Allocation:

  • Compare allocations across different sectors like education, healthcare, defense, infrastructure, and rural development.
  • Understand the rationale behind allocation changes and their potential impact.

Step6. Understanding Fiscal and Revenue Deficit:

  • Analyze the reasons behind the deficit and its implications for the economy.
  • Compare the deficit figures with previous years and government targets.
  • Revenue deficit in 2024-25 is targeted at 2% of GDP. This is lower than the revised estimate of 2.8% in 2023- 24.
  • Fiscal deficit in 2024-25 is targeted at 5.1% of GDP, lower than the revised estimate of 5.8% of GDP in 2023-24

Step7. Scrutinizing Policy Announcements:

  • Identify key policy changes impacting various sectors and individuals (e.g., tax changes, new schemes).
  • Assess the potential impact of these policies on economic growth, investment, and social welfare.

Step8. Reading the Finance Bill:

  • The Finance Bill, translating budget proposals into law, is typically tabled a few weeks after the budget. Be patient and watch out for it.
  • Once available, analyze the legal provisions, fiscal measures, and changes in tax laws affecting you or your interests.

Step9. Referring to Economic Survey (Once Available):

  • Analyze the economic outlook, key trends, and challenges highlighted in the survey.
  • Relate its findings to budget proposals and their potential impact.

Step10. Staying Updated:

  • Follow post-budget discussions, expert analyses, and media interpretations to gain deeper insights and diverse perspectives.

Additional Tips:

  • Use official government websites and budget documents as primary sources.
  • Look for simplified explanations and infographics from reliable sources.
  • Consider your personal and professional interests when analyzing specific budget aspects.

Remember, the budget is a complex document. Take your time, explore different resources, and ask questions to gain a comprehensive understanding of its implications for you and the nation.

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