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Last updated on February 14th, 2023 at 01:30 am

State and Union budgets serve as policy documents for the current administration. In accordance with its constitutional role, the Union Budget focuses on matters of national concern. Similar to the federal budget, the state budget is mandated by schedule 7 of the constitution to address issues of national and local significance. It has been noted that state budgets are presented following federal budgets. The state budget is tuned by the union budget. This results from the state’s reliance on the federal government for financial support. The Union government provides cash for dictionary planning. States’ reliance on unions is increased as a result. The Difference Between Union Budget And State Budget will aid candidates taking the UPSC Civil Service Exam in fully comprehending and knowing their similarities. Candidates who are looking for the distinction will find it after reading this post. Candidates are urged to study this page through to the conclusion in order to fully understand the Difference Between Union And State Budget.

Difference Between Union Budget And State Budget

The differences are explained in tabular form for better understanding. Scroll down to know the major Difference Between Union Budget And State Budget.

State Budget

Union Budget

  • In the state budget, there is no such thing as a railway budget
  • A finance bill and an appropriation bill, which deal with the government’s anticipated expenditures for the upcoming year and its anticipated revenue receipts, make up the union budget. A budget for the railroads comes before it
  • Similar methods are used by state governments to raise funds as well, although they also receive a portion of central taxes as well.
  • The revenue for the union budget is obtained through taxation on the items on the union list and concurrent list, as well as through internal and external borrowings, income from various government services, and sin taxes on alcohol, tobacco, and fuel. State governments also raise money primarily through these taxes.
  • The states are in charge of the majority of social welfare concerns. They have a more significant impact on social capital than on industrial capital. Examples of state-related topics include access to clean water, sanitation, and education. Agriculture and land ownership fall under the purview of the state.
  • Things like access to clean water, sanitation, and education are examples of state-related issues that are not affected by the Union Budget. The state is in charge of land ownership and agriculture.
  • States now have less room to manoeuvre financially and in policymaking.
  • The realm of state policymaking has also been invaded by centrally supported programs.
  • The governor has the authority to intervene in state governments’ budgeting processes by holding back a money bill until the president has approved it.
  • The Governor has no authority to interfere in the Union Budget.

Union Budget

According to Article 112 of the Indian Constitution, the Union Budget for a year, also referred to as the annual financial statement, is a declaration of the anticipated receipts and expenditures of the government for that particular year. The fiscal year of the government, which runs from 1 April to 31 March, is kept in the Union Budget. The Union Budget is divided into two categories: Revenue Budget and Capital Budget.

Both the government’s revenue inflows and outflows are reflected in its revenue budget. The two categories of revenue receipts are taxable income and non-tax revenue. The expenses incurred to keep the government’s operations running smoothly and offer inhabitants a variety of services are known as revenue expenditures. If revenue expenditures exceed revenue inflows, the government has a revenue deficit.

The capital budget includes government capital receipts and payments. Loans from the general public, other governments, and the RBI account for the majority of the government’s capital receipts. Capital expenditure is the term used to describe the creation of tools, furnishings, structures, buildings, healthcare facilities, educational facilities, etc. A fiscal deficit occurs when the government’s overall spending is higher than its overall revenue.

State Budget 

The state budget outlines the spending and revenue for the government for a given year. A budget is required by law for each fiscal year, which spans from January to December of that year and describes the government’s projected spending. The budget includes an estimate of the financing sources for the expenses or the state’s expected earnings. The deepest and widest possible revenue collection, the best possible revenue expenditure, minimizing revenue leakage, and minimizing the fiscal deficit are the main goals of the state budget. Due to the state budgets’ smaller worth compared to the union budget and the limited financial devolution provided to the states under India’s constitutional system of federalism, state budgets do not generate as much interest.

Difference Between Union Budget And State Budget: FAQs

Which budget covers the complete fiscal year?

An annual financial statement covering the complete fiscal year is the union budget.

 Who delivers the Union budget during the joint Rajya Sabha and Lok Sabha sessions?

The Union Budget was delivered by the Finance Minister during the joint Rajya Sabha and Lok Sabha sessions.

What distinguishes the state budget from the union budget?

The main distinction between the union budget and the state budget is that the state budget is limited in the boundary of the state but the union budget has every right to interfere with the state budget.

When will the Union Budget start?

The Union Budget 2023 will start on January 31st, 2023.

Are the state and union budgets identical?

No. Budgets for the state and the union are not the same. To learn the distinctions between the state and union budgets, read this page.

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