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Terms to know before FM reads his July 10 Budget speech

Here is a list of  terms to know before finance minister Arun Jaitley reads his July 10 Budget speech in Parliament.

     Last Updated: July 8, 2014  | 20:11 IST
Terms to know before FM reads his July 10 speech
Finance minister Arun Jaitley left with fod and consumers affairs minister Ram Vilas Paswan.

Here is a list of  terms to know before finance minister Arun Jaitley reads his July 10 Budget speech in Parliament.

Capital Expenditure
Expenditure incurred to acquire, build assets, infrastructure or to upgrade existing infrastructure facilities.
Current Capital expenditure-
2013-14 (Rev. Est.) - Rs. 1,90,894 Cr

Gross Fixed Capital Formation
Gross fixed capital formation (GFCF) refers to the net increase in physical assets (investment minus disposals) within a fixed period of time. GFCF in India is estimated at 20 lakh crore in 2013-14 as against 20.02 lakh crore in 2012-13. In terms of GDP at market prices, the rates of GFCF at current and constant (2004-05) prices during 2013-14 are estimated at 28.3% and 32.3%.

Non Plan Expenditure

Any expenditure incurred other than to implement 5 year plans of planning commission and other pre planned ministry demands. Non-plan revenue expenditure is accounted for by interest payments, subsidies, wage and salary payments to government employees, grants to States and Union Territories governments, pensions, police, economic services in various sectors, other general services such as tax collection, social services, and grants to foreign governments.

Current Non-Plan expenditure-
2013-14 (Rev. Est.) - Rs. 11,14,902.32 Cr.

Subsidy

A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy is usually given to remove some type of economic problem and is often considered to be in the interest of the public.
India's Total Subsidy bill :
Rs. 2,46,397 Crore ( this includes Oil Subsidy of Rs.63,427 Cr, fertilizer subsidy of Rs. 67,970 Cr etc)

Incremental Capital Output Ratio (ICOR)

ICOR basically refers to the additional capital required for generating additional output.

Revenue Deficit

Revenue deficit refers to the excess of revenue expenditure over revenue receipts.
Current Revenue deficit:
2013-14 (Revised Est.) --  Rs. 91.54 Billion

Fiscal  Deficit

It is the difference between the revenue receipts plus non-debt capital receipts and total expenditure including loan, net of repayments.

(This indicates the total borrowing requirements of the government. More the deficit more the debt required by the government)
Current Fiscal deficit:
2013-14 (Revised Est.) --  Rs. 5.08 Trillion i.e. 4.5% of GDP


Current Account  Deficit
If a country's total imports of goods, services is more than its total export of goods, services and transfers it results in current account deficit.
2013-14 (advance estimates): -32.4 ($ billions)

Plan Expenditure

It consists of both Revenue Expenditure and Capital Expenditure of the Center on the Central Plan, Central Assistance to States and Union Territories. . This is developmental in nature and is spent on schemes detailed in the Plan.
2013-14 (revised):  Rs 475532 crore

Tax Deduction

It is a deduction from gross income that arises due to various types of expenses incurred by a taxpayer.

Excise Duties

An indirect tax levied on goods manufactured within the country. Usually these are passed on to the consumer.

Gross domestic product

Total value of the goods and services produced by economic resources located in a country in a year.

GDP (actual value at constant 2004-05 prices), 2013-14 (provisional):  Rs 5,741,791 crore

Gross domestic savings

Gross domestic savings is Gross Domestic Product minus final consumption.
Gross Domestic Savings (% of GDP), 2013-14 (advance estimates): 30.5

WPI inflation

The Wholesale Price Index or WPI is the price of a representative basket of wholesale goods. The inflation rate is the percentage rate of change in the price level.

Inflation - WPI (Average), 2013-14 (advance estimates): 5.9

Revenue expenditure

Revenue expenditure is for the normal running of the government's department and various services, interest charged on debt incurred by government, subsidies etc

2013-14 (revised):  Rs 371851 crore

Capital Receipts

 
Capital Receipts consist of loans raised by the Center from the market, government borrowings from the RBI & other parties, sale of Treasury Bills and loans received from foreign governments. Other items that also fall under this category include recovery of loans granted by the Center to State governments & Union Territories and proceeds from the dilution of the government's stake in Public Sector Undertakings

2013-14 (revised):  Rs 546182 crore


Direct Taxes

Taxes paid directly by the person or organisation on whom they are levied. Income Tax and Corporate Tax fall under this tax category.


FRBM Act

The FRBM Act, 2003 which became effective from July 5, 2004 mandates the Central Government to eliminate revenue deficit by March, 2009 and to reduce fiscal deficit to an amount equivalent to 3 per cent of GDP by March, 2008.

Direct Taxes code

The direct tax code seeks to consolidate and amend the law relating to all direct taxes, namely, income-tax, dividend distribution tax, fringe benefit tax and wealth-tax so as to establish an economically efficient, effective and equitable direct tax system which will facilitate voluntary compliance and help increase the tax-GDP ratio.


Central plan outlay

It refers to the government's budgetary support to the Plan. It is the division of monetary resources among different sectors in the economy and ministries of the government.

2013-14 Revised Estimates: Rs 614134 crore

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