Tezzbuzz Desk- The country’s general budget is going to be presented in the Parliament on 1 February 2026. Like every year, this time too the eyes of crores of people will be fixed on the budget speech of the Finance Minister. For the common man, budget often means what became cheaper, what became expensive and how much tax relief was given. But before this it is important to understand a basic question – after all, where does the government get the money to spend on such a large scale?
Just as a family prepares a household budget according to its income and expenses, similarly the government also prepares complete accounts of its earnings and expenses to run the country. The budget is not just a list of expenses, but it is also a complete account of the income of the government.
Tax is the biggest and most important source of income for the government. It is called the backbone of the country’s economy. There are mainly two types of taxes – direct tax and indirect tax.
Direct tax is that which reaches the government directly from your pocket. Like income tax on your earnings or corporate tax paid by companies. This amount goes directly into the government treasury.
Indirect tax is the tax which you cannot see but which you pay every day. When you buy any item from the market—be it a needle or a car—the GST charged on it becomes the government’s income. Similarly, excise duty on petrol, diesel and liquor is also a major source of revenue for the government. With this money the government runs its administration and implements welfare schemes for the poor.
Often people believe that the government earns money only through taxes, but the truth is much further than this. Government is also a big business entity. The income earned other than tax is called non-tax revenue.
When you pay fees for any government service, get a passport made or pay a traffic challan, that amount is also the government’s income. Apart from this, a part of the profits earned by public sector companies like Railways, Government Banks, Postal Department and ONGC is given to the government in the form of dividend.
The government also earns a lot from natural resources. The government gets thousands of crores of rupees from auctions of coal, minerals, oil-gas, and spectrum for mobile networks. All these sources together strengthen the government treasury.
Many times the government’s income falls short of its expenses. When there is shortage of money for development schemes, infrastructure and public welfare programmes, the government resorts to borrowing. In the language of budget, this is called meeting the deficit.
For this, the government issues bonds in the market, which are bought by banks, insurance companies and sometimes even common citizens. Apart from this, the government also uses the money deposited in small savings schemes like PPF, Post Office Savings for its expenses.
When needed, the government takes loans from foreign institutions or other countries. At the same time, sometimes by selling stake in its government companies—which is called disinvestment—the government raises a large lump sum of money.
Overall, the budget not only decides where and how much will be spent, but also shows how the government raises money to run the country. The budget to be presented on 1 February 2026 will also tell the story of this balance – the story of coordination between income, expenditure and future plans. This is why the budget is not just a financial document but a roadmap that decides the economic direction of the country.
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