Budget Dictionary: To understand the Finance Minister’s budget speech on February 1, it is necessary to understand the meaning of the words used in it.
How to Understand Budget Speech: Union Finance Minister Nirmala Sitharaman will present the budget of the next financial year i.e. 2022-23 on the first date of next month i.e. February 1. The budget contains announcements to support the economy along with the details of the government’s earnings and expenditure during the financial year. In this, terms like fiscal deficit, disinvestment and balance of payment are used. In such a situation, to understand the budget, it is necessary to understand the meaning of the words used in it. Below, information about the complete terminology of the budget is being given in easy language.
Financial year
Usually we all consider January to December as a year but the government business is according to the financial year. The financial year in India starts from 1st April and ends on 31st March of the following year. That is, a new account of the government, banks, companies etc. opens from April 1, in which entry is made till March 31 next year.
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Blue Sheet
Hundreds of pages of budget documents and blue colored secret sheets containing key figures are called blue sheets. It is the backbone of the budget process and is kept secret, even from the finance minister.
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Economic Survey
Usually, just a day before the budget, the government presents the Economic Survey in Parliament. In this, the complete picture of the economy is presented and there is a complete account of the economic health of the country. Through this, the government tells the country about the condition of the economy. In this, what was the trend of development throughout the year, how much capital came in which area, how various schemes were implemented, etc., all these things are known. It contains information about government policies. Economic survey is considered to be the mainstay of the budget. Although the government should implement its recommendations, it is not necessary.
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Zero Budget
Zero budget means that no balance or expenditure of the previous financial year is carried forward in it. Understand this in such a way that if crores of rupees have been allocated to MPs under any government scheme, but only a part of it has been spent, then it is not necessary to re-allocate the remaining money to them. Wherever it is needed again, money will be allocated there.
Direct/Indirect Taxes
The tax that the government levies on income and profits is direct tax and the tax that it collects on goods and services is indirect tax. Indirect tax can be understood as if you have purchased any goods from the market, then the price you are paying includes tax.
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GST & Excise Duty
GST i.e. Goods and Services Tax means uniform tax levied across the country on any goods or services. Apart from this, excise tax is levied on some items in the states, the rate of which varies from state to state. The tax on alcohol is an example of this. Prior to June 30, 2017, excise tax was applicable on most of the goods in the country, but after the implementation of GST system in the country on July 1, 2017, most of the goods have come under its purview.
Customs Duty
Custom duty is paid by the importer or exporter on the goods which are imported or exported into the country. Its effect on the common people is such that if the government increases this duty on gold, then jewelery can become expensive because now you will have to pay more tax.
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Fiscal Deficit
When the total expenditure of the government exceeds its total income ie revenue, then it has to prepare a deficit budget by borrowing. This difference between the government’s total expenditure and total revenue is called fiscal deficit. While computing the total revenue, the amount borrowed is not added to it. Fiscal deficit is considered to be the most important figure of a government’s economic condition and its fiscal policy.
Revenue Deficit
When revenue is spent more than the revenue received by the government, then it is called revenue deficit. This means that the government’s earnings are not enough for every day’s accounting.
Fiscal Policy
The decisions taken by the government to coordinate expenditure and revenue through taxation to achieve and monitor the country’s economic goals are called fiscal policy. Whereas monetary policy is prepared by the Reserve Bank of India (RBI) to manage the demand and supply of currency in the economy.
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Inflation
Inflation refers to the rate or rate of increase or decrease in inflation in an economy. Rising inflation means that the prices of things are increasing rapidly, which reduces the purchasing power of our currency i.e. rupee i.e. the power to buy goods and services. Governments keep this in mind while making their economic policies.
Budget Estimates/Revised estimates
In the entire financial year, how much the government will earn through taxes and how much the government will spend, it is called budget estimates. However, after the presentation of the budget, the government reviews the income and expenditure for the remaining days of the financial year and then makes the estimates, which are called Revised Estimates.
Consolidated Fund of India
Whatever revenue the government receives in the entire financial year, whatever money is borrowed and loans are received, they go to the Consolidated Fund. Apart from some expenses related to contingency fund or public account, money is received from this fund for all other expenses of the government, but the important thing is that the government cannot withdraw money from this fund without the approval of Parliament.
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Contigency fund of India
The President uses this fund for any contingencies. There is about 500 crores in this. Parliament’s permission is not required to withdraw money from this fund, but this fund is constituted by the Parliament itself, that is, the Parliament itself decides how much money will be in this fund.
Disinvestment
When the government sells or liquidates wholly or partly any of its assets or subsidiaries, it is called disinvestment. It can be understood in such a way that if the government has 100 percent stake in a company and if the government sells its 25 percent stake in it to someone, then it is disinvestment.
Balanced Budget
When the government presents such a budget for a financial year in which expenditure equal to revenue has been shown, then it is called balanced budget.
Current Account Deficit
This shows the business situation of the country. If the exports are more and more money comes into the country than the money going out of the country through imports then the situation is favorable and it is known as current account surplus. But if the money going out of the country through imports is more than the money coming in on account of exports, then it is called current account deficit.
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Gross Domestic Product (GDP)
Gross Domestic Product (GDP) is called Gross Domestic Product ,. It is achieved by adding up the value of all goods and services produced within the country’s borders during a financial year. The rate at which GDP increases or decreases in the current financial year as compared to the previous financial year is called the growth rate of the economy or GDP growth rate. It is a popular way of measuring the economic progress of a country.
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