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Difficulty: EasyEconomic Developments, Union & State Budgets, and Economic Surveys

Consider the following statements regarding the Union Budget of India:

1. The Annual Financial Statement is presented to Parliament in accordance with Article 112 of the Constitution of India.
2. The Railway Budget continues to be presented as a separate budget distinct from the General Union Budget.

Which of the statement(s) given above is/are correct?

  1. 1 onlyAnswer
  2. B
    2 only
  3. C
    Both 1 and 2
  4. D
    Neither 1 nor 2

Answer

1 only
Statement 1 is accurate because Article 112 of the Constitution requires the government to present the Annual Financial Statement before Parliament every financial year. Statement 2 is inaccurate because the practice of presenting a separate Railway Budget was abolished in 2016, and the Railway Budget has been integrated into the unified Union Budget since the 2017–18 fiscal year.

Step-by-Step Solution

1
Evaluate Statement 1 regarding constitutional provisions for the Union Budget.
Statement 1 is correct. Article 112 of the Constitution of India specifies that the President shall cause to be laid before both Houses of Parliament an 'Annual Financial Statement' for each financial year.
Constitutional backing for the budget stems directly from Article 112.
2
Evaluate Statement 2 regarding the status of the Railway Budget.
Statement 2 is incorrect. The 92-year-old practice of a separate Railway Budget was ended by the Cabinet in 2016, merging it into the unified Union Budget starting with Budget 2017–18.
The merger was implemented to facilitate holistic financial planning for multi-modal transport infrastructure.

Key Concept

Constitutional provisions for the Union Budget (Article 112) and budgetary structural reforms.
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Topics

Economic Developments, Union & State Budgets, and Economic Surveys

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