BUDGET TERM
Consolidated Fund-All revenues received by government, the loans raisyed by it, and receipts from recoveries of loans granted by it, form the consolidated fund. All expenditure of government is incurred from the consolidated fund.
Contingency Fund-This is the fund into which the government dips its hands in emergencies, to meet urgent, unforeseen expenditures and can't wait for authorization by Parliament. The contingency fund is an imprest placed at the disposal of the President for such financial exigencies.
Corporate Tax-This is the tax paid by corporates or firms on the incomes they earn.
Customs Duties-These are levies charged when goods are imported into, or exported from, the country, and they are paid by the importer or exporter. Usually, these are also passed on to the consumer.
Direct Taxes-These are the taxes that are levied on the income and resources of individuals or organizations. Normally they are levied on wealth or income through income tax, corporate tax, capital gains tax, inheritance tax, etc.
Excise Dutie-These are levies paid by manufacturers on items manufactured within the country. Usually, these are passed on to the consumer.
Fiscal Deficit-This is the gap between the government's total spending and the sum of its revenue receipts and non-debt capital receipts. It represents the total amount of borrowed funds required by the government to completely meet its expenditure.
Fiscal Policy-Fiscal policy is a change in government spending or taxing designed to influence economic activity. By fine-tuning the level and pattern of budgetary surpluses and how they are financed, governments can control the level of aggregate demand in the economy.
Income Tax-This is the tax levied on individual income from various sources like salaries, investments, interest, etc.
Indirect Taxes-These are the taxes paid by consumers when they buy goods and services. They include sales tax, excise and customs duties.
Inflation-A sustained increase in the general price level. The inflation rate is the percentage rate of change in the price level.
MAT-This is the Minimum Alternative Tax, a minimum tax that a company must pay, even if it is under zero tax limits.
Monetary Policy-This comprises actions taken by the central bank (the RBI) to change the supply of money and the interest rate, and thereby affect economic activity. Governments hope that by regulating the level of money or liquidity in the economy, they will achieve policy objectives like controlling inflation, improving the balance of payments, raising the growth of the Gross National Product, or maintaining a certain level of employment.
National Debt-It is the total outstanding borrowings of the central government exchequer. It is the debt owed by the government as a result of earlier borrowing to finance budget deficits. That part of the debt not held by the central bank (RBI) is the publicly held national debt.
Non-Plan Expenditure-Non-Plan expenditure covers all expenditure of government not included in the Plan. It includes both development and non-development expenditure.
Peak Rate-This is the highest rate of customs duty applicable on an item.
Plan Outlay-Plan outlay is the amount for expenditure on projects, schemes and programmes announced in the Plan. The money for the Plan Outlay is raised through budgetary support and internal and extra-budgetary resources. The budgetary support is also shown as plan expenditure in government accounts.
Plan Expenditure-Money given from the government's account for the central Plan is called Plan expenditure. This is developmental in nature and is spent on schemes detailed in the Plan.
Primary Deficit-The primary deficit is the fiscal deficit minus interest payments. It tells us how much of the government's borrowings are going towards meeting expenses other than interest payments.
Progressive Tax-A tax in which the rich pay a larger percentage of income than the poor, in contrast to Regressive Tax.
Proportional Tax-A tax taking the same percentage of income regardless of the level of income.
Regressive Tax-A tax in which the poor pay a larger percentage of income than the rich. Contrast with Progressive Tax.
Revenue Budget-The Revenue Budget consists of revenue receipts of government and the expenditure met from these revenues. Tax revenues are made up of taxes and other duties that the Union government levies.
Revenue Deficit-The difference between revenue expenditure and revenue receipt is known as revenue deficit. It shows the shortfall of government's current receipts over current expenditure.
Revenue Expenditure-Revenue expenditure is for the normal running of the government's department and various services, interest charged on debt incurred by government, subsidies, etc.
Revenue Receipts-Revenue receipts consist of tax collected by the government and other receipts consisting of interest and dividend on investments made by government, fees and other receipts for services rendered by government.
Value Added-The value of a firm's output less the value of intermediate goods bought from other firms.
Important Facts:-
1. R.K. Shanmukham Chetty presented India's first Budget in November 1947. The entire exercise was more of a review of the economy and no new taxes were proposed.
2. K.C. Neogy has been the only finance minister who hasn't presented a Budget.
3. Jawaharlal Nehru was the first Prime Minister to present the Budget when he held the finance portfolio (1958-59).
4. Morarji Desai has presented 10 Budgets, the maximum by any finance minister.
5. Both Manmohan Singh and Yashwant Sinha have presented five Budgets in a row.
Contingency Fund-This is the fund into which the government dips its hands in emergencies, to meet urgent, unforeseen expenditures and can't wait for authorization by Parliament. The contingency fund is an imprest placed at the disposal of the President for such financial exigencies.
Corporate Tax-This is the tax paid by corporates or firms on the incomes they earn.
Customs Duties-These are levies charged when goods are imported into, or exported from, the country, and they are paid by the importer or exporter. Usually, these are also passed on to the consumer.
Direct Taxes-These are the taxes that are levied on the income and resources of individuals or organizations. Normally they are levied on wealth or income through income tax, corporate tax, capital gains tax, inheritance tax, etc.
Excise Dutie-These are levies paid by manufacturers on items manufactured within the country. Usually, these are passed on to the consumer.
Fiscal Deficit-This is the gap between the government's total spending and the sum of its revenue receipts and non-debt capital receipts. It represents the total amount of borrowed funds required by the government to completely meet its expenditure.
Fiscal Policy-Fiscal policy is a change in government spending or taxing designed to influence economic activity. By fine-tuning the level and pattern of budgetary surpluses and how they are financed, governments can control the level of aggregate demand in the economy.
Income Tax-This is the tax levied on individual income from various sources like salaries, investments, interest, etc.
Indirect Taxes-These are the taxes paid by consumers when they buy goods and services. They include sales tax, excise and customs duties.
Inflation-A sustained increase in the general price level. The inflation rate is the percentage rate of change in the price level.
MAT-This is the Minimum Alternative Tax, a minimum tax that a company must pay, even if it is under zero tax limits.
Monetary Policy-This comprises actions taken by the central bank (the RBI) to change the supply of money and the interest rate, and thereby affect economic activity. Governments hope that by regulating the level of money or liquidity in the economy, they will achieve policy objectives like controlling inflation, improving the balance of payments, raising the growth of the Gross National Product, or maintaining a certain level of employment.
National Debt-It is the total outstanding borrowings of the central government exchequer. It is the debt owed by the government as a result of earlier borrowing to finance budget deficits. That part of the debt not held by the central bank (RBI) is the publicly held national debt.
Non-Plan Expenditure-Non-Plan expenditure covers all expenditure of government not included in the Plan. It includes both development and non-development expenditure.
Peak Rate-This is the highest rate of customs duty applicable on an item.
Plan Outlay-Plan outlay is the amount for expenditure on projects, schemes and programmes announced in the Plan. The money for the Plan Outlay is raised through budgetary support and internal and extra-budgetary resources. The budgetary support is also shown as plan expenditure in government accounts.
Plan Expenditure-Money given from the government's account for the central Plan is called Plan expenditure. This is developmental in nature and is spent on schemes detailed in the Plan.
Primary Deficit-The primary deficit is the fiscal deficit minus interest payments. It tells us how much of the government's borrowings are going towards meeting expenses other than interest payments.
Progressive Tax-A tax in which the rich pay a larger percentage of income than the poor, in contrast to Regressive Tax.
Proportional Tax-A tax taking the same percentage of income regardless of the level of income.
Regressive Tax-A tax in which the poor pay a larger percentage of income than the rich. Contrast with Progressive Tax.
Revenue Budget-The Revenue Budget consists of revenue receipts of government and the expenditure met from these revenues. Tax revenues are made up of taxes and other duties that the Union government levies.
Revenue Deficit-The difference between revenue expenditure and revenue receipt is known as revenue deficit. It shows the shortfall of government's current receipts over current expenditure.
Revenue Expenditure-Revenue expenditure is for the normal running of the government's department and various services, interest charged on debt incurred by government, subsidies, etc.
Revenue Receipts-Revenue receipts consist of tax collected by the government and other receipts consisting of interest and dividend on investments made by government, fees and other receipts for services rendered by government.
Value Added-The value of a firm's output less the value of intermediate goods bought from other firms.
Important Facts:-
1. R.K. Shanmukham Chetty presented India's first Budget in November 1947. The entire exercise was more of a review of the economy and no new taxes were proposed.
2. K.C. Neogy has been the only finance minister who hasn't presented a Budget.
3. Jawaharlal Nehru was the first Prime Minister to present the Budget when he held the finance portfolio (1958-59).
4. Morarji Desai has presented 10 Budgets, the maximum by any finance minister.
5. Both Manmohan Singh and Yashwant Sinha have presented five Budgets in a row.
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