Question

How does the finance ministry estimate the expenditure to the income for the next financial year?

• A. Obtains estimates of income and expenditure from all other countries
• B. Obtains estimates of income and expenditure from the World Bank
• C. Obtains estimates of income and expenditure from all ministries
• D. Obtains estimates of income and expenditure from the Reserve Bank of India

Answer 1

The correct option is C Obtains estimates of income and expenditure from all ministries

An annual budget is a financial statement showing the expected income and expenditure for a financial year. It estimates the expenditure from all ministries. The Finance Ministry also considers forecasts from the states and union territories. Sometimes, various industry groups and farmers also put forward their demands and views before the Finance Minister.