Budget Gossip Ep. 1: Know the Correlation Between Inflation and Budget

Finance Budget 2024: Union Finance Minister Nirmala Sitharaman is expected to present the Union Budget for FY 2024-25 in the second half of July. The Budget is an estimate of the Center’s revenue and expenditure for the fiscal year beginning April 1 and ending March 31. Usually, the Union Budget is presented on February 1, but due to the general elections, FM Sitharaman presented an interim budget in February 2024. 

Budget and Inflation

This video will talk about the various aspects of budget and inflation, how the budget impacts inflation and vice versa. Inflation has an impact on government revenue through taxes (for example, higher prices can lead to higher VAT/GST collections) as well as government spending, particularly if the costs of goods and services increase. High inflation can drive up government spending on subsidies and social programs, potentially leading to larger budget deficits. Budgets may include measures to control inflation, such as spending cuts or higher interest rates.