Every year the Government of India comes up with the union budget presented in the Parliament by the Union Finance Minister. In simple layman words, the term budget means an estimate or prediction of total income and expenditure for a set period.
The upcoming union budget tabled by the Finance Minister, Nirmala Sitharaman, will be interesting to see as markets are keen to know how the government will take measures to revive the battering economy marred by the coronavirus crisis.
Budget, a financial plan for a defined period usually a year helps in setting goals, measuring outcomes and planning for contingencies. A budgetary plan can be chalked out and utilized efficiently by individuals, institutions, corporates/ business houses, governments and so on.
Let's understand What are Budget Targets?
A Budget Target is estimated money or amount for a specific fiscal period and it includes budget key combination for capital and operating expenses. A budget target can be used to set up a financial goal for a budget plan.
Usually, the pre-set budget will be compared with the actual results to estimate the variances from expected performance.
For example, The country's fiscal deficit expanded to touch a whopping 109% of the full year's target during the first five months of fiscal 2020 - 2021 due to the coronavirus crisis as it continued to drag on government's finances.
The difference between the revenue and expenditure from April to August 2020 stood at Rs 8.70 lakh crore in India as per the report published in the Controller General of Accounts. The deficit stood at 79% of the budgeted target a year ago.
The government of India had set a fiscal deficit target of Rs 7.96 lakh crore (3.5% of gross domestic product) while presenting the Union Budget 2020 - 2021.
Every year, the government in its Union Budget will estimate and set a fiscal deficit target. If there is a deficit, then it shows that the government is spending beyond its income. The fiscal deficit is a shortfall in the government's income as compared to its expenses.