What is Union Budget:
Union Budget keeps the account of the government's finances for the fiscal year which begins on April 1 and continues till March 31.
Under Article 112 of the Indian Constitution, the Union Budget or the annual financial statement keeps the government's estimated receipts and expenditure for that particular financial year.
The Budget comprises the Revenue Budget and Capital Budget:
What is a Revenue Budget:
It includes the government's revenue receipts and expenditure. There are, again, two kinds of revenue receipts---tax (income tax, excise duty) and non-tax revenue (interest receipts, profits). Revenue expenditure is incurred on day-to-day functioning of the government and on various services offered to the citizens. If revenue expenditure exceeds revenue receipts, the government faces a revenue deficit.
What is Capital Budget:
It includes the government's capital receipts (borrowing, disinvestments) and payments. Loans from public, foreign governments and the RBI form a major part of the government's capital receipts. Capital expenditure is the expenditure on creating assets or reducing liabilities. A fiscal deficit occurs when the government's total expenditure exceeds its total revenue.