Consider the following statements:

1. Part 'B' of the Budget speech of the finance minister includes description of the initiatives on economic front to be taken up by the Government for the coming year in addition to direct and indirect tax proposals.

2. The receipts on account of the partial disinvestment of Central Government's holdings in the equity capital of public sector enterprises are revenue receipts.

Which of these statements is/are correct?

Solution

The budget is a statement of the estimated receipts and expenditure of the Government of India in a financial year. In addition to the estimates of receipts and expenditure, the budget contains certain other elements. Part B of the Budget Speech contains details of economic and financial policy of the coming year, that is, taxation proposals, prospects of revenue, spending programme and introduction of new schemes/projects. Hence Statement 1 is correct. Revenue Receipts are receipts which do not have a direct impact on the assets and liabilities of the government. It consists of the money earned by the government through tax (such as excise duty, income tax) and non-tax sources (such as dividend income, profits, interest receipts). Hence Statement 2 is correct.