BUDGET ANALYSIS FOR THE LAST TW

YEARS
2006-07 and 2007-08
 BUDGET

• A budget is a plan to achieve a given objective

or objectives

• Budgets are detailed quantified financial plans

of action for a specific period in the future

• A budget is an expression of an organisation’s

strategy in financial terms
 SIGNIFICANCE OF BUDGET

• Controls your money

• What you are
spending
• Where you are
spending
• Frees up money for
you
• Helps you get out of
debt
• Improves the quality
of life
 UNION BUDGET

The Union Budget is:

•Not just an annual statement of receipts and

expenditures
•It is an instrument for fulfilling the obligations
of the state
•A political statement of the priorities set by
government in resource allocation.
 UNION BUDGET
INCLUDES

•The expenditure & revenue of every year

•Capital receipts from within India or from
foreign governments & multilateral
organizations
•Plan and non-plan expenditure
•Policy announcements
•Short-term and long-term effects on finances
(Taxes)
 Receipts

Revenue
Receipt Capital Receipts

Market Loans, Long Term

Corporation Tax, Income Tax,
Borrowings
Wealth Tax, Customs, Service Tax
State Provident Funds
 BUDGET FORMULATION IN
INDIA
•In India, the Budget is presented in Parliament on
a date fixed by the President.

•Part A of Budget deals with general economic

survey of the country while Part B relates to
taxation proposals.

•The finance minister is required to submit the

Budget in Parliament usually on the last day of
February so that the Lok Sabha has one month to
review and modify the Budget proposals.

•If by April 1, the beginning of the country's fiscal

year, the parliamentary discussion on the Budget
is completed, then only the Budget as proposed by
BUDGET 2006-2007 & BUDGET
2007-2008

A COMPARITIVE ANALYSIS
 BIRD’S EYE VIEW

•Finance minister P. Chidambram

• GDP Estimation for 2006-07 –
Rs.46,93,602 cr.
• GDP Estimation for 2007-08 – Rs.
45,04,210 cr.
 REVENUE &
EXPENDITURE
REVENUE BREAK- UP
REVENUE BREAK- UP
EXPENDITURE BREAK- UP
EXPENDITURE BREAK- UP
 GDP Of INDIA
India's GDP at Constant Prices: 2002–08
1200

1000
USD Billion

800

600
1068
400 838
737
556 638 188
200 469

0
2002–03 2003–04 2004–05 2005–06 2006–07 2007–08 Apr-J un
08
 SECTORAL BREAK- UP
Growth in sectors at Constant Prices (2007–
08):
1,200
Industry: 10.8%
Services: 8.5%
Agriculture: 4.5%
1,000

800 564
USD Billion

600 439
398
400
237 314
191 245
204
200 125
103
135 154 190
105 105
0
1999–00 2002–03 2005–06 2006–07 2007–08
Agriculture Indus try Services
BUDGET &
INDUSTRY
 AGRICULTURE SECTOR
• In 2006-07,Rs 7391 cr was given to
agriculture sector which was 0.18% of GDP
• In 2007-08Rs 8558 cr was given to this
sector which was 0.19%of GDP.
 ENERGY SECTOR
• Rs 68825 Cr in 2006-07 was
allocated to this sector which
comprises of 1.69% of GDP
• 79158 Cr was given to this sector in
2007-08 which is 1.73% of GDP.
 COMMUNICATIONS
• Rs 25812 cr which is .56% of GDP for
2007-08 was allocated to
communications
• In 2006-07 RS 17851 cr which is
0.43 % of GDP was allocated.
REFORMS
 EXPENDITURE ON HEALTH

Total

30
25
20
Percentage 15
Total
10
5
0
2003-04 2004-05 2005-06 2006-07 2007-08
Expenditure on health
EXPENDITURE ON
EDUCATION
TAXES….
REVENUE FROM
TAXES
 FDI
• The FDI in 2006-07 reached US $ 23 billion
and crossed US $ 11.2billion in the first six
months of 2007-08

• Mauritius (44.24 %), US (9.37%), the UK

(7.98 %) and the Netherlands (5.81
%)25 are the main source countries for FDI
to India
THANKS !!!