In our country, currently 40% of the population is under 18 years of age. If you are someone who belongs to this lot, there’s a lot of information to keep you interested in the upcoming budget.
It’s anticipated that India’s Union Budget 2022 will focus more on the learning loss due to COVID-19. And also there will be implementation of the new National Educational Policy.
On 1st February, Finance Minister Nirmala Sitharaman presented the Union Budget, the second one post covid-19 pandemic hit the country.
Also read: Key Highlights of Budget 2022-23
Decoding the budget and why is it important?
To put it in simple words, the union budget of India is nothing but our country’s annual financial statement. Referring to the article 112 of the Indian Constitution, budget presentation is mandatory before a new fiscal year marks its beginning.
On unveiling it, the budget remains valid for the following fiscal year that start in the next few days post budget announcement and will stay valid until next year.
The budget consists of funds that are going to be allocated to different sectors like Financial Sector, Health, Education, Railway, Rural, Small and Medium Industries and so on.
The amount spent in each sector could have a huge impact on your life but gradually. It could determine how much extra or less you would be paying for the year.
In simplest of examples, it could mean that you’ll either end up paying less or more for your hospital bills, your rail ticket or even the footwear and clothes that you wear.
Also read: National Savings Certificate at a glance
The union budget is divided into two parts-
- Capital Budget-The capital budget gives details with regards to capital payments and capital receipts of the government. The capital payments can be the money spent on different sectors. The capital receipts account for the loans taken from the RBI or the general public.
- Revenue Budget-The revenue budget comprises the revenue expenditure and revenue receipts. The government is known to be suffering from a ‘revenue deficit’ if the revenue receipts are lower than the revenue expenditure.
The importance- our country has a parliamentary democracy and the government cannot arbitrarily spend, borrow, or tax money. In order for the government to function effectively, also to enhance the economic and social framework of the country, coming up with a budget plan is essential.
The Throwback Time:
The Budget was first introduced in the country first on April 7, 1860 when Scottish economist and politician James Wilson from East India Company presented it to the then British Crown.
Independent India’s first budget was presented on November 26, 1947 by the then Finance Minister R K Shanmukham Chetty.
How much does the country spend on your education?
India is infamous for spending a small chunk of its budget towards the education sector. It spends only about 3% of its GDP (Gross Domestic Product) on the education sector currently. This scenario has been prevalent since 1968, and time and again the education sector has highlighted the need to increase the budget to 6% of the GDP.
Spending the additional 3 % will help you seek education with better facilities, that amount could be used for skill development amongst students, towards extracurricular activities like sports and arts.
GST and education sector
This is also a reason that you should follow the Union Budget as it will determine how much you’d be paying for seeking education in the country and how much of it goes towards the tax.
Ed-tech is definitely the future of the education sector. And currently there is a demand that the Goods and Services Tax on educational services should be reduced from 18% to 5%.
There has been a shift in the learning process owing to the covid-19 pandemic. And therefore, reducing the GST will eliminate the pressure that’s there on the parents, making education affordable and accessible to all. The Public-private partnerships, the long-term tax exemptions as well as the support of ed-tech start-ups is going to help the education sector to take the next leap.
Budget determines the tax that you’ll pay:
One of the most awaited announcements in the union budget every year is related to personal taxation as it outlines how much taxes and cess you are going to pay.
In every year’s budget, the income tax rates and slabs are reviewed. The income tax slabs however have remained unchanged since 2014.