Mera Budget Mahan
The day I understand the Union Budget in its entire glory (read gory) .. I’ll blog about it :-). The economic and accounting terms make it difficult to comprehend and people usually form opinions on this ‘thought colossus’ by reacting to what perceptibly concerns them. For the manufacturers its excise; for the international traders its customs, duties; for farmers its subsidies; for you and me just one word – tax
In order to furrow my understanding of the budget, I attempted an exercise in partial futility. I downloaded the Annual Financial Statements of 2005-06 from the finmin website and constructed a rudimentary balance sheet which I fondly call ‘Vande Mataram’ :-).
If 1 < 2 then the country is facing a fiscal deficit. This simply means that for every 100 rupees the country earns it spends 110.The financing of this extra 10 rupees is of importance and is covered under the fiscal policy. Governments take debts from the public (remember your grandparents investments in NSC, Post Office schemes) and external debt (Responsible NRIs like you and me buy government bonds). Interestingly, the US has almost always been a deficit economy, but still is the most admirable economy. So I conclude that my economic gumption does not allow me to comment any further on the demerits of fiscal deficit.
PS: Have been trying to find why the Railway Budget is presented before the Union Budget? But I still haven’t found what I am looking for :-)
Update: For an expert opinion read this and this.
4 comments
Great..you actually developed a balance sheet to represent this. I still can't balance a balance sheet nor can I read it intelligently, a fact well published in SPJCM (but I can teach CAs and CFAs a thing or two in Cost Accounting :P). So to comment anything about this would be an insult to your efforts.
Only one thing, does it have my favourite suspense account entry?? :D
actually i have erred.. its more of a P&L since we are talking of only revenues and expenditures.
So no suspense accounts in the picture which you see:-)
Ha ha .. jo balance nahi hota usko suspense account mein daal do!
See..I can't even tell whether it is a balance sheet or a P&L account. That is how terrble I am. Aur kya karta hoon..banking sector sambhaal ta hoon!! I tell you, if you can gas you can go places!! Cos gas always rises :)
I have never ever understood the budget or for that matter how the share market works! :) Pea-brained I am!
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