Budget 2021: What is capital budget? Here's all you need to know

Union Finance Minister Nirmala Sitharaman will present the Union Budget 2021-2022 on February 1. One of the unique aspects of the Union Budget 2021-2022 is that it’s not going to be a voluminous tome, rather the Finance Ministry will be going digital.

Unlike previous years, the budget documents will not be printed this year following the COVID-19 protocol, and will instead be distributed electronically to the Members of Parliament (MPs). Previously, a ceremony marked the launch of printing exercise for the budget. This will be the first time since the presentation of independent India's first budget on November 26, 1947, that the documents containing income and expenditure statement of the Union government along with the finance bill, detailing new taxes and other measures for the new financial year, will not be physically printed.

Meanwhile, Nirmala Sitharaman, Minister of State for Finance Anurag Thakur and senior officials of the Finance Ministry on Saturday participated in the symbolic 'Halwa Ceremony' that marks the beginning of compilation of budget documents.

While the count down for the Union Budget 2021 has begun, but before setting eyes on the Budget for this year, let us understand what Capital Budget means.

Capital Budget is one of the two parts of the government budget. Generally, the budget is divided into revenue budget and capital budget. This classification is made by considering the items that comes under the two budget components.

According to Ministry of Finance, Capital Budget consists of capital receipts and capital payments. The capital receipts are loans raised by the Government from the public (these are termed as market loans), borrowings by the Government from the Reserve Bank of India and other parties through the sale of Treasury Bills, the loans received from foreign Governments and bodies, disinvestment receipts and recoveries of loans from State and Union Territory Governments and other parties.

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.

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