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BUDGET TERMS
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BUDGET TERMS

BUDGET: It is the Annual Financial Statement by the Finance Ministry inaccordance with provisions of Article 112 of the Indian Constitution,giving details of proposed govt expenditure and how money will be raised.
CENTRAL PLAN: It consists of the Government’s budget support to the Plan and the internal and extra budgetary resources raised by public enterprises.
PlanExpenditure: It includes both revenue and capital expenditure of the government on the Central Plan,Central assistance to States and Union Territory plans.
Non-PlanExpenditure: It includes bothrevenueandcapitalexpenditureoninterestpayments, theentiredefenceexpenditure(bothrevenueandcapitalexpenditure),subsidies,postaldeficit,policy,pensions,
economic services, loans topublic enterprises andloans aswellasgrants toStateGovt.,UTandforeignGovt.
BUDGET IS DIVIDED IN TO TWO PARTS: CAPITAL AND REVENUE:
CAPITALBUDGET: Itconsistsofcapital receiptsandpayments. Italsoincorporates transactions inthePublicAccount. Ithas twocomponents:CapitalReceiptandCapitalExpenditure.
Capital Receipt: Include loans raised by the government frompublicwhich are calledmarket loans, borrowings fromthe RBI and other parties through sale of Treasury Bills, loans received fromforeign
governments, recoveries of loans grantedbyCentretoState andUTgovernments and otherparties.
CapitalExpenditureTongueayments foracquisitionofassets likeland,buildings,machinery,equipment,as alsoinvestments inshares etc,andloansby theCentretoStates,Govt.companies,corporations and
otherparties.*REVENUEBUDGET:Revenuereceipts of thegovernment (tax revenuesplus other revenues)andtheexpendituremet fromtheserevenues. Ithas twocomponents:RevenueReceiptand
RevenueExpenditure.RevenueReceipt: It includes proceeds of taxes andotherduties leviedby theCentre, interestanddividendoninvestmentsmadeby theGovt. feesandother receipts forservices
renderedby thegovernment.
Revenue Expenditure: It ismeant for the normal running of government departments and various services, interest charges on debt incurred by the government and subsidies. Broadly speaking, expenditure
which does not result in creation of assets is treated as revenue expenditure. All grants given to StateGovt. and other parties are also treated as revenue expenditure even though some of the grantsmay be for
creationofassets.
*STEPS IN BUDGET PRESENTATION:
BudgetSpeech: It is thefirststepinpresentationofbudget.TheSpeechis presentedevery yearby theFinanceMinister intheLokSabha,usuallyonlastworkingdayofFebruary.
ExpenditureBudget:Containsexpenditureestimatesmadeforaschemeorprogrammeunderbothrevenueandcapitalheads.
FinanceBill:This contains thegovernment’sproposals for levyofnewtaxes,modificationof theexistingtaxstructureorcontinuanceof theexistingtaxstructurebeyondtheperiodapprovedbyParliament.
DemandsforGrants: It is astatement ofestimates ofexpenditurefromtheConsolidatedFundandis required tobe voted by theLokSabha.Generally, oneDemand forGrant is presented by each
Ministry.AppropriationBill: It is presented toParliament for its approval, so that the government canwithdrawfromtheConsolidatedFund the amounts required formeeting theexpenditurechargedon
theConsolidatedFund.No amount canbewithdrawn fromtheConsolidatedFundtill theAppropriationBill is voted and enacted.
*TYPES OF DEFICIT: Excess of Expenditure over Receipts is known as Deficit.
BudgetaryDeficit: It is the excess of total expenditure over total receipts.
CapitalDeficit: It refers to the excess of capital expenditure over capital receipts.
RevenueDeficit: It refers to the excess of revenue expenditure over revenue receipts.
Fiscal Deficit: It is the difference between the revenue receipts plus certain non-debt capital receipts and the total expenditure including loans (net of repayments). This indicates the total borrowing
requirementsof thegovernment fromall sources.
PrimaryDeficit: It is the difference between fiscal deficit and interest payments.
MonetisedDeficit: It indicates the level of support extended by theRBI to theGovt’s borrowing programme.
VARIOUS GOVT ACCOUNTS:
Consolidated Fund: It ismadeupofall revenues receivedby thegovernment, loans raisedby it,andalsoits receipts fromrecoveriesof loans grantedby it.Allexpenditureof thegovernment is incurredfromthe
ConsolidatedFundandnoamountcanbewithdrawnfromtheFundwithoutauthorisationfromParliament.
Public Account: It is an account inwhichmoney received through transactions not relating to theConsolidated Fund is kept.Besides the normal receipts and expenditure of the government relating to the
Consolidated Fund, certain other transactions enter government accounts in respect of which the government actsmore as a banker, for example, transactions relating to provident funds, small savings
collections, otherdeposits etc.Suchmoney is kept inthePublicAccount andtheconnecteddisbursements.
Contingency Fund: It is an imprest placed at the disposal of thePresident and is used by the government to incur all its urgent and unforeseen expenditure. Parliamentary approval for such expenditure and for
withdrawalofanequivalentamountfromtheConsolidatedFundissubsequentlyobtainedandtheamountspent fromtheContingencyFundisrecoupedtotheFund.
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