Budget 2025: How to read the documents that FM Sitharaman will present in parliament

Budget speech

The speech read out in Parliament is divided into two parts. The government uses Part A to talk about its vision, plans to launch new programmes, allocation of funds for various welfare schemes, incentives to push development, economic expansion and job creation and the fiscal position of the economy. For instance, in the July 2024 budget, the finance minister announced plans to incentivise job creation, improve women’s participation in the workforce and provide accommodation close to the workplace.

Part B is all about taxation – changes to tax on personal income tax and corporate profits, changes to customs duties and easing compliance burden in complying with tax laws. The finance minister cannot announce any changes to the goods and services tax (GST) regime in the budget because those decisions are made by the GST Council comprising the union finance minister and all state finance ministers. The government announced relief for small taxpayers opting for the new tax regime in Part B of her speech last year. She also announced some changes to the customs duty structure in last year’s budget.

The annexures of the speech copy provide some details of the announcements made in Parts A and B.

Also read: Budget 2025: A quick recap of Budget 2024 announcements

Budget at a glance

This document more or less gives a bird’s-eye view of the actual numbers that go into making the budget. It summarises the receipts and expenditure budget. Thus, it shows how much the government expects to earn from taxes and other sources including disinvestment and what it intends to spend under major heads of expenditure along with allocation of flagship programmes as well as its deficits. This document is useful for those who do not want to get into minute details of the budget.

Memorandum explaining the provisions in the Finance Bill

This is also a fairly easy-to-understand document for those who do not want to get immersed in the hard numbers or the jargon of tax laws. All the changes proposed through the Finance Bill to give effect to the budget announcement on tax laws are explained in this document. Readers with an interest in tax laws and others who wish to understand changes in income tax and direct tax can refer to this document.

Also read: Budget 2025: Five concerns of the common man that need Nirmala Sitharaman’s attention

Finance Bill

This is a document meant largely for chartered accountants and lawyers. All changes proposed by the finance minister that require changes to tax law have to be approved by both houses of Parliament before they can be implemented. The Finance Bill has all the amendments that are to be made to the income tax, customs, excise and customs duties laws and other laws that deal with benami property, black money and anti-avoidance. The Parliament debates this Bill and may propose changes. It is only after this Bill becomes law that changes in taxes proposed by the finance minister are implemented.

Also read: Budget 2025: Why the government is reluctant to reduce personal income tax

Revenue and Expenditure Budgets

These documents give minute details of every rupee that the government intends to raise and spend, and this is of special interest to economists, those looking at public finance and those working in the area of development. The Revenue budget document lists all sources of revenues – taxes, interest, loans, RBI transfers, disinvestment and all other sources. It also gives trends in revenue collection over the years. The Expenditure budget document provides the government’s spending plans for every programme and scheme under every ministry, the amounts to be transferred to states and subsidies to be transferred to citizens and businesses.

Apart from these documents, the government lays a statement on how it is managing the fiscal deficit and a statement of its assessment of the growth prospects of the economy with specific underlying assumptions.