Understand the meaning of difficult terms related to general budget – in simple language

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The full General Budget 2024 will be presented in the Lok Sabha in the second half of July (second fortnight of July)…

The interim budget was presented in February this year due to the Lok Sabha elections 2024 and now the full budget will be presented after the election results when the Narendra Modi government has come to power for the third consecutive term. According to media reports, the General Budget 2024 will be presented in the Lok Sabha in the second half of July (second fortnight of July). Everyone has curiosity and expectations about the budget, but sometimes the problem arises when some of the words used in the budget speech are not understood by the common man. So, today we have brought a budget dictionary, in which the meaning of all such difficult words is explained in colloquial language.

  1. Gross Domestic Product (GDP): The total market value of all types of products and services produced during a year is called Gross Domestic Product, and it includes three sectors – industry, agriculture and services.
  2. Gross National Product (GNP): The sum of the total market value of all products and services produced and invested abroad by domestic citizens during a year, minus the profits earned by foreign nationals in the domestic market, is called Gross National Product.
  3. Finance Bill: A bill introduced in Parliament to change tax related proposals or to maintain the existing tax structure or impose new taxes is called a Finance Bill.
  4. Budget Account: The assessment of revenue and expenditure received by the government from various types of taxes during the financial year is called budget accounting.
  5. Revised Accounts: The difference between the calculations (estimates) made in the budget and their actual figures, taking into account the current economic situation, is called revised accounts, and it is mentioned in the next budget.
  6. Appropriation Bill: A bill introduced in Parliament to allow the government to withdraw money from the Consolidated Fund is called an Appropriation Bill.
  7. Fiscal Deficit: The difference between the government’s total expenditure (capital expenditure and revenue expenditure) and the government’s total revenue (revenue revenue and capital receipts including loans and advances) is called the fiscal deficit. Simply put, fiscal deficit represents the shortfall in government revenue compared to its expenditure. A government with a high fiscal deficit is spending more than it means. It is calculated on the basis of GDP.
  8. Revenue Receipts: All types of fees charged by the government, income and dividends on investments and amounts received in return for various services are collectively called revenue receipts. It is also called the current income of the government, which neither creates liabilities nor reduces the assets of the government. These receipts are divided into tax revenue and non-tax revenue. Traditionally, tax revenue is the main source of government revenue.
  9. Revenue Expenditure: Government Expenditure, which the government spends on routine works like maintenance and repairs including salaries of its employees, pensions and payment of interest and subsidies, is called revenue expenditure. Revenue expenditure also includes administrative expenditure. In addition, revenue expenditure also includes overheads such as rent payments, taxes and other establishment related expenses.
  10. Disinvestment: The process of selling the government’s stake in public undertakings, i.e. government-owned companies, is called disinvestment.
  11. Capital Receipts: Capital receipts are amounts received from non-operating sources. This includes loans taken from the market, money borrowed from the Reserve Bank and other institutions, money received from special securities issued to the National Small Savings Fund and also money received from recovery of own loans and investments of public enterprises.
  12. Capital Expenditure: Capital expenditure is an expenditure whose benefit is available not in one year but over several years. Under this, are included all the expenses which are incurred to acquire any fixed asset. That is, permanent assets are created by spending capital. Under this, expenditure is incurred on development of land, buildings, plant and machinery and other physical infrastructure. Capital expenditure also includes public debts and loans to various institutions and their prepayments.
  13. Revenue deficit: The difference between revenue expenditure and revenue revenue is called revenue deficit. Simply put, when the government spends more than it earns, it results in a revenue deficit. Revenue deficit also includes those transactions which have a direct impact on current revenue and expenditure of the government. A revenue deficit shows that the government’s own earnings are not sufficient to meet the day-to-day operations of its own departments. Over time, the revenue deficit itself turns into debt, as the government often has to borrow externally to meet the deficit.
  14. Budget deficit: The difference between total expenditure and revenue receipts, recovery of loans and advances and other non-debt capital receipts is called budget deficit. Simply put, when a government’s total expenditure exceeds its total revenue, a budget deficit occurs. It shows the financial condition of the country.
  15. Planned Expenditure: Such expenditure is called planned expenditure, in which production assets are created. Usually this type of expenditure is related to welfare schemes, including construction of schools, bridges and hospitals etc.
  16. Non-planned expenses: Such public expenditure is considered as non-plan expenditure, which does not lead to any kind of development work. The amount for non-plan expenditure is allocated from the consolidated fund of the country, and includes expenditure on the defense sector, payment of pension and dearness allowance to government employees and expenditure on dealing with natural calamities like floods, droughts and heavy rains etc.
  17. Direct Tax: Direct taxes are those taxes that are collected directly from the citizens. This category includes income tax, tax on income from business, tax on income from shares or other properties and wealth tax etc. This is a compulsory tax which the citizen has to pay without expecting any benefit.
  18. Indirect Taxes: Such taxes, i.e. taxes which are not directly deposited by the citizen, but taken from him in some other form, are called indirect taxes. This includes taxes levied on goods manufactured in India or imported or exported. Indirect taxes also include excise duty and customs duty.
  19. Income tax: The tax collected from your income when you have income is called income tax or income tax. Two income tax systems currently exist, with income tax levied at different rates based on different income slabs.
  20. Cess: A cess is imposed on your tax amount by the government to raise funds for a specific purpose. Currently, the government is collecting health and education cess at the rate of four percent from all its taxpayers.
  21. Surcharge: The surcharge is usually levied on people belonging to the ‘higher income group’. As per the current rules, no surcharge is levied on taxable income up to ₹50 lakh, but on income above that, surcharge is levied at different rates in both the tax regimes. A surcharge is applied on the amount of income tax payable at a rate determined by earnings.
  22. Excise Duty: Excise duty is collected from the manufacturer on goods manufactured in the country and sold in the country. It is mandatory for any manufacturer to make this payment before bringing their product to the market. Excise duty is a major part of any government’s revenue.
  23. Foreign Direct Investment or FDI: When a foreign company invests in any company or sector present in our country through its branch office or subsidiary company, it is called Foreign Direct Investment.

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