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Before going to specific words
associated with the Budget, let’s take a look at what is the
budget. Nowhere in the world does the budget attract as much
attention as in India. The Budget is generally described as a
detailed plan for a measured period, setting goals and outlining
resources to meet those goals. In short, it provides details of the
government's receipts and payments. It also gives details of tax
revenues and other receipts besides a general breakup of
expenditure, allocation of plan outlays by sectors as well as by
various ministries. The Budget also gives information on the
transfer of resources from the Center to the states, revenue
deficit, primary deficit and fiscal deficit of the Center. Read on
for some words linked directly or indirectly to the
budget.
AD-VALOREM DUTIES: These are the duties determined
as a certain percentage of the price of the product.
APPROPRIATION BILL: This Bill is like a green
signal enabling the withdrawal of money from the Consolidated Fund
to pay off expenses. These are instruments that Parliament clears
after the demand for grants has been voted by the Lok
Sabha.
BUDGETARY DEFICIT: Such a situation arises when the
expenses exceed the revenues. Here the entire budgetary exercise
falls short of allocating enough funds to a certain
area.
BUDGET ESTIMATES: These estimates
contain an estimate of Fiscal Deficit and the Revenue Deficit for
the year. The term is associated with the estimates of the Center's
spending during the financial year and the income received as
proceeds of tax revenues.
CAPITAL GOODS: Capital Goods are those goods that are used in the
manufacturing of finished products.
CAPITAL BUDGET: The word, capital, is long-term in nature. Capital Budget
keeps track of the government's capital receipts and payments.
This accounts for market loans, borrowings from the Reserve Bank
and other institutions through the sale of Treasury Bills, loans
acquired from foreign governments and recoveries of loans granted
by the Central government to state governments and Union
Territories.
CAPITAL PAYMENTS: Expenses incurred on acquisition
of assets are termed capital payments.
CENVAT: This is a replacement for the earlier
MODVAT scheme and is meant for reducing the cascade effect of
indirect taxes on finished products. The scheme is a more extensive
one with most goods brought under its preview.
CURRENT ACCOUNT DEFICIT: This deficit shows the
difference between the nation's exports and imports.
CUSTOM DUTIES: These duties are levied on goods
whenever they are either brought into the country or exported from
the country. The importer or the exporter pays custom
duties.
COUNTERVAILING DUTIES: This is levied on imports
that may lead to price rise in the domestic market. It is imposed
with the intention of discouraging unfair trading practices by
other countries.
CONSOLIDATED FUND: This is one big
reservoir where the government pools all its funds together. The
fund includes all government revenues, loans raised and recoveries
of loans granted.
CONTINGENCY FUND: It is more or less similar to
that extra little bit of savings that all mothers set aside in case
of an emergency. Likewise, the government has created this fund to
help it tide over difficult situations. The fund is at the disposal
of the President to meet unforeseen and urgent expenditure, pending
approval from Parliament. The amount that is withdrawn from the
fund is recouped.
CAPITAL EXPENDITURE: Long-term in nature they are
used for acquiring fixed assets such as land, building, machinery
and equipment. Other items that also fall under this category
include, loans and advances sanctioned by the Center to the State
governments, union territories and public sector
undertakings.
CAPITAL RECEIPT: Loans raised by the Center
from the market, government borrowings from the RBI & other
parties, sale of Treasury Bills and loans received from foreign
governments all form a part of Capital Receipt. Other items that
also fall under this category include recovery of loans granted by
the Center to State governments & Union Territories and
proceeds from the dilution of the government’s stake in Public
Sector Undertakings.
CENTRAL PLAN: It refers to the government’s
budgetary support to the Plan and, the internal and extra budgetary
resources raised by the Public Sector Undertakings.
DIRECT TAXES: Taxes imposed directly on the
customers such as the Income Tax and the Corporate Tax fall under
this category.
DISINVESTMENT: The dilution of the
government’s stake in Public Sector Undertakings is called as
disinvestment.
DEMAND FOR GRANTS: It is a statement of
estimate of expenditure from the Consolidated Fund. This requires
the approval of the Lok Sabha.
EXCISE DUTIES: These duties refer to duties imposed
on goods manufactured within the country.
FISCAL DEFICIT: It is the difference between the
Revenue Receipts and Total Expenditure.
GROSS DOMESTIC PRODUCT: Total market value of the
goods and services manufactured within the country in a financial
year.
GROSS NATIONAL PRODUCT: Total market value of the
finished goods and services manufactured within the country in a
given financial year, plus income earned by the local residents
from investments made abroad, minus the income earned by foreigners
in the domestic market.
INDIRECT TAXES: Taxes imposed on goods
manufactured, imported or exported such as Excise Duties and Custom
Duties.
MODVAT: It stands for Modified Value Added
Tax and is a way of giving some relief to the final manufacturers
of goods on Excise Duties borne by their suppliers.
MONETIZED DEFICIT: Measures the
level of support the RBI provides to the Centre’s borrowing
program.
PEAK RATE: It is the highest rate of Custom Duty
applicable on an item.
PERFORMANCE BUDGET: It is a compilation of
programs and activities of different ministries and
departments.
PUBLIC ACCOUNT: It is an account where
money received through transactions not relating to consolidated
fund is kept.
PLAN EXPENDITURE: Consists of both Revenue
Expenditure and Capital Expenditure of the Center on the Central
Plan, Central Assistance to States and Union
Territories.
PRIMARY DEFICIT: Fiscal Deficit minus
Interest payments.
REVENUE DEFICIT: It is the difference between
Revenue Expenditure and Revenue Receipts.
REVENUE SURPLUS: Opposite of Revenue
Deficit, it is the excess of Revenue Receipts over Revenue
Expenditure.
REVISED ESTIMATES: Usually given in the following
budget, it is the difference between the Budget Estimates and the
actual figures.
REVENUE BUDGET: Consists of Revenue
Receipts and Revenue Expenditure of the government.
REVENUE RECEIPT: Consists of duties
imposed by the Centre, interest and dividend on investments made by
the government.
REVENUE EXPENDITURE: Expenditure incurred
for the normal functioning of the government departments and
various other services such as interest charges on debt incurred by
the government.
SUBSIDIES: Financial aid provided by the Center to
individuals or a group of individuals to be competitive. The grant
of subsidies is also aimed at improving their skills of those who
benefit from the subsidies.
NON-PLAN EXPENDITURE: Consists of Revenue
and Capital Expenditure on interest payments, Defense Expenditure,
subsidies, postal deficit, police, pensions, economic services,
loans to public sector enterprises and loans as well as grants to
State governments, Union territories and foreign
governments.
FINANCE BILL: Consists the
government’s proposals for the imposition of new taxes,
modification of the existing tax structure or continuance of the
existing tax structure beyond the period approved by the
Parliament.
VALUE ADDED TAX: It is based on the
difference between the value of the output over the value of the
inputs used.
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