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Budget 2023: Key terms in the budget explained
Budget 2023: Here are some important terms that you should understand to be able to comprehend the budget announcements better
Union Finance Minister Nirmala Sitharaman is set to present the interim Budget 2024 in Parliament on February 1- the last budget before the country goes into general elections. Here are some important terms that you should understand to be able to comprehend the budget announcements better:
Annual Financial Statement (AF)
The document highlights receipts and expenditures of the government during the financial year.
Consolidated Fund
The entire revenue raised by the government, market borrowings, and receipts from loans are part of the Consolidated Fund of India. Government's expenditure comes from this fund barring items that are met from the Contingency Fund.
Contingency Fund
This is set aside for any unforeseen events and is at the disposal of the President. Any money withdrawn from this fund, with prior approval of Parliament, is repaid from the Consolidated Fund later.
Read more: Interim Budget 2024: What is it and how is it prepared?
Public Account
This account contains the amount of money used for transactions where the government merely acts as a banker. The money received by or on behalf of a central or a state government is credited to this account.
Inflation
The rate of increase in prices of goods and services is known as inflation.
Direct taxes
Taxes that are levied directly from taxpayers, such as income tax and corporate tax are called direct taxes.
Indirect taxes
Taxes that are levied indirectly from taxpayers, such as GST, VAT, customs and excise duties, and service tax are called indirect taxes.
Fiscal policy
It is an instrument meant to monitor the domestic economic position- an estimate of taxation and government spending.
Fiscal deficit
A fiscal deficit is when the government’s expenditure exceeds its revenue, excluding market borrowings. It is calculated as a percentage of the GDP and is essentially the gap between the government's total spending and the sum of its total receipts.
Finance Bill
It is used by the government to propose the levy of new taxes, alterations in the tax structure, or even when continuing the existing tax structure.
Divestment
The process of the sale of existing assets is known as disinvestment or divestment.
Revenue receipt (expenditure)
The revenue receipt contains anything and everything that does not lead to the creation of assets- salaries, subsidies, and interest payments.
Revenue deficit
A revenue deficit occurs when the government’s total revenue expenditure exceeds its total revenue receipts.
Capital expenditure
The total amount of money that the government spends towards the development, acquisition or degradation of machinery or assets is called capital expenditure.
