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The Budget speech, delivered by the Union Finance Minister in Parliament, has two sections — parts A and B.
Part A of the budget speech
The first part of the budget speech provides an overview of the economy of the previous and current years, and also gives Budget estimates for the next financial year. Basically, part A covers review of the prevailing economic situation of the country, and is more concerned about the ‘macro’ aspect of the economy.
Part A provides the broad framework of expenditure in details for different sectors, introduces new schemes, and explains the priorities of the government. This segment of the Budget speech also specifies the focus areas of the government.
In part A, the finance minister provides a brief overview of total funds raised by the government through taxes or borrowing, and discusses how the money is to be spent on Budget deficit/surplus. It also presents a complete breakdown of the expenditure of each ministry.
Essentially, Part A deals with the general economic survey of the country. Fiscal deficit, current account deficit (CAD) and inflation are also discussed in Part A of the Budget speech.
Part B of the Budget speech
The second part of the Budget speech highlights the government’s tax proposals for the next financial year, and it has a direct bearing on the personal finance of citizens. Part B should also be read with the Finance Act, which is a document containing legal provisions. A reader can understand the provisions by going through the attached Memorandum of Explanations, which gives a broad background of changes.
The second section of the speech apprises taxpayers of the state of the economy, the progress the government has made on various developmental measures, and the direction of future policies.
While concluding Part B of the Budget speech, the finance minister describes proposals for taxation or discloses variations in the existing taxation system. The ‘Annual Financial Statement’ is presented at the conclusion of the speech of the finance minister.
Click on the links below to read full Budget speech from recent Union Budgets: