Disregarding Chief Minister Nitish Kumar's demand for grant of Bihar special category status, ahead of Bihar assembly election in November 2025, Nirmala Sitharaman, the Union Finance Minister donned Madubani Sari to refer to Bihar on three occasions in her 57-page long budget speech. All the States including Bihar have again been taken for a ride because the Union government has increased its share in import duties by raising the Agriculture Infrastructure and Development Cess (AIDC) but reduced the Basic Customs Duty (BCD), which is shared with states.
In her eighth speech budget speech, she announced the establishment of a Makhana Board in Bihar. The initiative aims to enhance production, processing, and value addition of Makhana in the state. She said, "A Makhana Board will be established in the state to improve production, processing, value addition, and marketing of makhana. The people engaged in these activities will be organized into FPOs. The Board will provide handholding and training support to makhana farmers and will also work to ensure they receive the benefits of all relevant Government schemes." FPOs refers to Farmer Producer Organizations. FPO is a generic name, which means farmer- producers’ organization incorporated/registered either under Part IXA of Companies Act or under Co-operative Societies Act of the concerned States. A Producer Organisation (PO) is a legal entity formed by primary producers, viz. farmers, milk producers, fishermen, weavers, rural artisans, craftsmen. A PO can be a producer company, a cooperative society or any other legal form which provides for sharing of profits/benefits among the members. FPO is one type of PO where the members are farmers. The ownership of the PO is with its members. It is an organization of the producers, by the producers and for the producers.
The minimum number of membership depends on the legal form of the PO. For example, 10 or more primary producers can incorporate a Producer Company under Section 581(C) of Indian Companies Act 1956 (same provisions are retained in the 2013 Act). Section 465(1) of the Companies Act, 2013 mentions that "the provisions of Part IX A of the Companies Act, 1956 (1 of 1956) shall be applicable mutatis mutandis to a Producer Company in a manner as if the Companies Act, 1956 has not been repealed until a special Act is enacted for Producer Companies." There is no restriction on the maximum number of membership. The Income derived by a Producer Company through agricultural activities as defined in Income Tax Act, 1961 as amended from time to time, is treated as agricultural income and is exempted from taxation.
Producer Organisation can be registered under any of the following legal provisions:
a. Cooperative Societies Act/Autonomous or Mutually Aided Cooperative Societies Act of the respective State
b. Multi-State Cooperative Society Act, 2002
c. Producer Company under Section 581(C) of Indian Companies Act, 1956, as amended in 2013
d. Section 25 Company of Indian Companies Act, 1956, as amended as Section 8 in 2013
e. Societies registered under Society Registration Act, 1860
f. Public Trusts registered under Indian Trusts Act, 1882
The PO can undertake the following activities:
a. Procurement of inputs
b. Disseminating market information
c. Dissemination of technology and innovations
d. Facilitating finance for inputs
e. Aggregation and storage of produce
f. Primary processing like drying, cleaning and grading
g. Brand building, Packaging, Labeling and Standardization
h. Quality control
i. Marketing to institutional buyers
j. Participation in commodity exchanges
k. Export
The minister announced that the capacity of the Indian Institute of Technology (IIT), Patna will be expanded as part of a broader initiative to enhance IITs. This includes developing additional infrastructure across five IITs to accommodate 6,500 more students.
A National Institute of Food Technology, Entrepreneurship, and Management will be set up in Bihar to promote food processing activities. She said,"The institute will provide a strong fillip to food processing activities in the entire Eastern region. This will result in (1) enhanced income for the farmers through value addition to their produce, and (2) skilling, entrepreneurship and employment opportunities for the youth." Besides the expansion of the Patna airport, the minister announced a brownfield airport in Bihta, Patna. The minister announced financial support for the Western Koshi Canal ERM Project benefiting a large number of farmers cultivating over 50,000 hectares of land in the Mithilanchal region of Bihar.
Bihar government had submitted a 32-page long memorandum to the minister seeking Rs 13,000 crore in central assistance for flood management in North Bihar, additional borrowing limit, 1% GSDP rebate for Bihar until its per capita income reaches the national average. The State had asked for initiation of Pradhan Mantri Gram Sadak Yojana-5.0 to widen and strengthen rural roads, a 250 km Greenfield Corridor from Birpur to Deoghar to promote religious tourism, connecting Nepal’s Pashupatinath to Vaidyanath Dham in Bihar-Jharkhand, construction of a 270 km high-speed corridor from Ladaniya to Nawada and a 135 km Raxaul-Dighwara corridor to enhance regional connectivity and facilitate goods transport to Nepal, establishment of PM Gatishakti Railway University in Jamalpur, Bihta-Aurangabad and Sultanganj-Deoghar railway lines, creation of 10 new Kendriya Vidyalayas and renovation of Vikramshila University. The Union Budget 2024-25 had announced Rs 59,000 crore for road connectivity, power, and flood management in Bihar. One year after the announcement, there is nothing visible on the ground to demonstrate that these announcements in the Union Budget Speech are meaningful.
Union Budget is the Annual Financial Statement (AFS), as provided under Article 112 of the Constitution of India. It shows the estimated receipts and expenditure of the Government of India for 2025-26 along with estimates for 2024-25 and also actuals for the year 2023-24. The receipts and disbursements are shown under three parts in which Government Accounts are kept viz., (i) The Consolidated Fund of India, (ii) The Contingency Fund of India and (iii) The Public Account of India. The Annual Financial Statement distinguishes the expenditure on revenue account from the expenditure on other accounts, as is mandated in the Constitution of India. The Revenue and the Capital sections together, make the Union Budget.
The estimates of receipts and expenditure included in the Annual Financial Statement are net of refunds and recoveries respectively. The significance of the Consolidated Fund, the Contingency Fund and the Public Account as well as the distinguishing features of the Revenue and the Capital portions are as under:
The Consolidated Fund of India (CFI) draws its existence from Article 266 of the Constitution. All revenues received by the Government, loans raised by it, and also receipts from recoveries of loans granted by it, together form the Consolidated Fund of India. All expenditure of the Government is incurred from the Consolidated Fund of India and no amount can be drawn from the Consolidated Fund without due authorization from the Parliament.
Article 267 of the Constitution authorizes the existence of a Contingency Fund of India which is an imprest placed at the disposal of the President of India to facilitate meeting of urgent unforeseen expenditure by the Government pending authorization from the Parliament. Parliamentary approval for such unforeseen expenditure is obtained, ex-post-facto, and an equivalent amount is drawn from the Consolidated Fund to recoup the Contingency Fund after such ex-post-facto approval. The corpus of the Contingency Fund as authorized by Parliament presently stands at `30,000 crore.
Money held by Government in trust are kept in the Public Account. The Public Account draws its existence from Article 266 of the Constitution of India. Provident Funds, Small Savings collections, receipts of Government set apart for expenditure on specific objects such as road development, primary education, other Reserve/Special Funds etc., are examples of moneys kept in the Public Account. Public Account funds that do not belong to the Government and have to be finally paid back to the persons and authorities, who deposited them, do not require Parliamentary authorization for withdrawals. The approval of the Parliament is obtained when amounts are withdrawn from the Consolidated Fund and kept in the Public Account for expenditure on specific objects (the actual expenditure on the specific object is again submitted for vote of the Parliament for withdrawal from the Public Account for incurring expenditure on the specific objects).
The Union Budget can be demarcated into the part pertaining to revenue which is for ease of reference termed as Revenue Budget and the part pertaining to Capital which is for ease of reference termed as Capital Budget.
The Revenue Budget consists of the revenue receipts of the Government (Tax revenues and Non-Tax revenues) and the revenue expenditure. Tax revenues comprise proceeds of taxes and other duties levied by the Union. The estimates of revenue receipts shown in the Annual Financial Statement take into account the effect of various taxation proposals made in the Finance Bill. Non-tax receipts of the Government mainly consist of interest and dividend on investments made by the Government, fees and other receipts for services rendered by the Government. Revenue expenditure is for the normal running of Government Departments and for rendering of various services, making interest payments on debt, meeting subsidies, grants in aid, etc.
Broadly, the expenditure which does not result in creation of assets for the Government of India, is treated as revenue expenditure. All grants given to the State Governments/Union Territories and other parties are also treated as revenue expenditure in the books of Union Government even though some of the grants may be used for creation of capital assets by Grantee bodies/entities.
Capital receipts and capital payments together constitute the Capital Budget. The capital receipts are loans raised by the Government (these are termed as market loans), borrowings by the Government through the sale of Treasury Bills, the loans received from foreign Governments and bodies, recoveries of loans from State and Union Territory Governments and other parties and miscellaneous capital Receipts etc. Capital payments consist of capital expenditure on acquisition of assets like land, buildings, machinery, equipment, as also investments in shares, etc., and loans and advances granted by the Central Government to the State and the Union Territory Governments, Government companies, Corporations and other parties.
The estimates of receipts and disbursements in the Annual Financial Statement and of expenditure in the Demands for Grants are shown according to the accounting classification referred to under Article 150 of the Constitution.
Article 113 of the Constitution mandates that the estimates of expenditure from the Consolidated Fund of India included in the Annual Financial Statement and required to be voted by the Lok Sabha, be submitted in the form of Demands for Grants. The Demands for Grants are presented to the Lok Sabha along with the Annual Financial Statement. Generally, one Demand for Grant is presented in respect of each Ministry or Department.
At the time of presentation of the Annual Financial Statement before the Parliament, a Finance Bill is also presented in fulfilment of the requirement of Article 110 (1)(a) of the Constitution, detailing the imposition, abolition, remission, alteration or regulation of taxes proposed in the Budget. It also contains other provisions relating to Budget that could be classified as Money Bill. A Finance Bill is a Money Bill as defined in Article 110 of the Constitution.
No comments:
Post a Comment