Any twelve-month period that is used for submission of accounts, taxation purposes and to state financial reporting by private and public sector companies is called a Fiscal Year.

In India, the Government has laid down the provision that the 12-month starting on April 1 and ending on March 31 of next year will be treated as a Fiscal Year.

To put it in perspective, this article was written on 2 February 2017, i.e., in Financial Year 2016–17. This is also called Fiscal Year ’17.

In the same way, the financial year for 2017–18 will start on 1 April 2017 and will end on 31 March 2018. So on 1 April 2017, we will enter Fiscal Year ’18.

The Finance Minister of India presented the annual Union Budget for 2017–18 in the Parliament of India on February 1. It is typically presented in February for the following reasons:

1. After presentation, the Budget is tabled in the Parliament where members of both the Houses would debate the various provisions listed in the Budget. This would require a few days of debate and discussion.
2. Also, after such budget debate, any amendment to the original provision (like increasing or decreasing the allocation for a said ministry/program and rolling back any budget proposal) will have to be tabled, discussed, passed, and brought into law by the Parliament.
3. Also, the administrative system, especially in case of tax administration, would need to be geared up to reflect any change in the financial, taxation or any other system.

The Finance Minister’s Budget Speech contains two major components: Part A and Part B.

Part A of the Speech contains the Economic Survey while Part B comprises the Union Budget Speech.

The Economic Survey is tabled by the Ministry of Finance in the Parliament along with the Union Budget.

The Economic Survey is an assessment of the performance of the Indian economy in the fiscal year going by. For example, the Economic Survey 2016–17 presents an assessment of the performance of the Indian economy in that fiscal year (i.e., 2016–17).

So while the Economic Survey is an assessment of the performance of the Indian economy in the fiscal year gone by (i.e., the one that ends on March 31 this year), the Union Budget is a statement of revenues and expenditures for the coming fiscal year, i.e., the one that starts on April 1 of this year.

Take a look at the table graphic below. This document titled, Budget at a Glance, is the best document to understand the components of the various types of figures in the Budget.

The Union Budget 2017–18 consists of the following (see next page):

• Actuals for 2015–16,
• Budget Estimates for 2016–17,
• Revised Estimates for 2016–17, and
• Budget Estimates for 2017–18.

The Actuals for 2015–16 may be represented as such but they STILL would be PROVISIONAL only. This means that these figures are NOT the final figures for 2015–16 but are subject to further revision. In fact, the final figures for 2015–16 will only be available toward the end of Financial Year 2016–17 (or Fiscal Year ’17).

Budget Estimates (BE) relate to the figures which the Finance Minister set out in his Budget Speech last year (i.e., on 28 February 2016) for the Financial Year 2016–17.

However, all figures – related to revenue collection, expenditure, other allocations – are subject to change. These numbers are mere ESTIMATES and not actuals. As the year progresses, such figures may sometimes need to be revised. For example, if there is low industrial and agricultural activity (meaning lower economic output), tax collections may dip. This, in turn, will reduce the government’s Revenue Receipts.

In such case, the Government may revise the Budget Estimates (made in the Budget). Such altered figures are labeled Revised Estimates (RE). These RE are listed in the third column.

In the fourth and last column, you will find Budget Estimates for the coming Financial Year 2017–18. These figures reflect the various estimates made by the Government in terms of Receipts (including tax collections) and Expenditures (including interest payments and salary payments to government employees).