As Interim Budget 2024 is awaited in which the government will lay out its financial roadmap till Lok Sabha elections this year, understanding concepts related to budget is pertinent as they help in giving insights into the economic health of the nation but also help in comprehending the government's priorities and strategies with respect to the economy. Here are some essential terms you should know ahead of the Interim Budget 2024:
Fiscal deficit
The gap between the government's total income and its total expenditure is called fiscal deficit- the money government borrows to run its day-to-day operations. A lower fiscal deficit is generally considered good for the economy.
Revenue deficit
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The gap between the government's revenue from taxes and other sources and its non-capital expenditure is called revenue deficit- the money government falls short of even after collecting taxes to meet its regular expenses. Lower revenue deficit is considered good for the economy.
GDP (Gross Domestic Product)
The total monetary value of all final goods and services produced in a country in a given year is called the Gross Domestic Product or GDP- a measure of the economy's health and size.
Inflation
A sustained increase in the general price level of goods and services in an economy over a period of time is called inflation. Lower the inflation, better the economy.
Direct taxes
{{/usCountry}}A sustained increase in the general price level of goods and services in an economy over a period of time is called inflation. Lower the inflation, better the economy.
Direct taxes
{{/usCountry}}Taxes levied directly on the income or wealth of individuals or corporations are called direct taxes.
Indirect taxes
Taxes levied on the consumption of goods and services are called indirect taxes.
Capital Expenditure
Government's expenditure on creating physical assets, such as infrastructure, buildings, and machinery is called capital expenditure.
Revenue expenditure
Government's expenditure on day-to-day operations, such as salaries, subsidies, and interest payments is called revenue expenditure.
Outlay
The total allocated funds for various sectors is called the outlay.