(Source: BloombergQuint)

BQExplains: What Is A Budget? 

At the beginning of a month or a year, every family or individual works out where their income will come from, how much it will be, and how they will allocate those earnings between their expenses. The government is not very different.

Before the beginning of a new financial year in April, the government reveals its annual budget which states where it hopes to earn its money from and how it plans to spend it. In 2019, India's Union Budget is slated to be announced on Feb. 1.

While in some countries, the budget is a mere accounting statement, in India the budget has evolved into a document that lays down the government's economic priorities. Higher spending on sectors such as agriculture, education and public welfare signifies a focus on improving socio-economic conditions in the country. In contrast, a focus on infrastructure, housing and roads might mean that the government is trying to boost long term economic growth potential.

A budget which lowers taxes for consumers may be considered populist in nature but one which cuts taxes for corporations may be a way to boost investment in the economy.

On budget day, Finance Minister Arun Jaitley will read out the document in the Lok Sabha after which the proposals are debated in both the Lok Sabha and the Rajya Sabha. The budget can only be implemented after parliamentary approval.