New Delhi: We have simplified important Budget items for our readers. These terms are not in alphabetical order, rather it covers those important terms that you should know:
It is a comprehensive statement of government finances, including spending, revenues, deficit or surplus, and debt. The budget is usually the government's main economic policy document, indicating how the government plans to use public resources to meet policy goals. As a statement of fiscal policy, the budget shows the nature and extent of the government's impact on the economy. The budget is prepared by the executive and then generally is submitted to the legislature to be reviewed, amended, and adopted as law.
It consists of the major events or stages in making decisions about the budget, and implementing and assessing those decisions. The budget cycle usually has four stages:
budget formulation, enactment, execution, and auditing and assessment
Or “unified budget”, is the presentation of the budget in which revenues from all sources and spending for all activities are included. In countries where the budget is divided into pieces (for instance, where there are separate budgets for “current” and “capital” expenditures) the consolidated budget combines these pieces. It may also include extra-budgetary institutions.
The term refers to government spending (or outlays) made to fulfill a government obligation, generally by issuing a check or disbursing cash. Expenditures can be Capital and current. Capital expenditures are investments in physical assets such as roads and buildings that can be used for a number of years. Current expenditures are spending on wages, benefit payments and other goods and services that are consumed immediately.
This is the gap between the government's total spending and the sum of its revenue receipts and non-debt capital receipts. It represents the total amount of borrowed funds required by the government to completely meet its expenditure.
Government actions with respect to aggregate levels of revenue and spending. Fiscal policy is implemented through the budget and is the primary means by which the government can influence the economy. An “easy” fiscal policy is intended to stimulate short-term economic growth by increasing government spending or reducing revenues. A “tight” fiscal policy restrains short-term demand by reducing spending or increasing taxes and is often intended to restrain inflation.
The government's 12-month accounting period; it frequently does not coincide with the calendar year. The fiscal year is named after the calendar year in which it ends.
(Gross Domestic Product): this is the total value of final goods and services produced in a country during a calendar year. Economic growth is measured by the change in GDP from year to year.
Aggregate economic data
Total expenditures and total production of goods and services related to the entire economy. For example, aggregate demand is the total spending on consumption, investment, government purchases, and net exports, while aggregate supply is the total amount of good and services produced in the economy.
Government debt is the outstanding amount that the government owes to private lenders at any given point in time.
Or “extra-budgetary”, term refers to government transactions that are not included in the annual budget.
It refers to the aggregate level of expenditures and revenues (and the resulting deficit or surplus) in the budget.
This is money received by people that may or may not be earned from productive activities and, after adjusting for taxes, is saved or spent on consumption of goods and services.
This term refers to the part of economics that studies the economy as a whole and particularly topics such as gross production, unemployment, inflation, and business cycles.
The term is related to the part of economics that studies topics such as individual markets, prices, industries, demand, and supply.
The highest valued alternative foregone in the pursuit of an activity.
The performance of government programs is assessed by examining whether they have delivered the desired outputs and outcomes. Outputs are defined as the goods or services provided by government agencies. Outcomes are a broader concept and include the impact of the program on social, economic, or other indicators, such as whether an increase in hours taught improved student test scores, whether more immunizations reduced sickness, or whether higher welfare benefits increased social equity.
These are the taxes that are levied on the income of individuals or organisations. Income tax, corporate tax, inheritance tax are some examples of direct taxation.
These are the taxes paid by consumers when they buy goods and services. These include excise and customs duties. Customs duty is the charge levied when goods are imported into the country, and is paid by the importer or exporter. Excise duty is a levy paid by the manufacturer on items manufactured within the country.
Plan expenditures are estimated after discussions between each of the ministries concerned and the Planning Commission. Plan expenditure forms a sizeable proportion of the total expenditure of the Central Government. The Demands for Grants of the various Ministries show the Plan expenditure under each head separately from the Non-Plan expenditure.
Non-plan revenue expenditure is accounted for by interest payments, subsidies (mainly on food and fertilisers), 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. Non-plan capital expenditure mainly includes defence, loans to public enterprises, loans to States, Union Territories and foreign governments.
Central Plan Outlay
It is the division of monetary resources among the different sectors in the economy and the ministries of the government.
The proposals of the Government for levy of new taxes, modification of the existing tax structure or continuance of the existing tax structure beyond the period approved by Parliament are submitted to Parliament through the Finance Bill. The Budget documents presented in terms of the Constitution have to fulfil certain legal and procedural requirements and hence may not by themselves give a clear indication of the major features of the Budget.
This term is often used in a budgetary sense to mean the amount of funds available to the government to spend. Resources generally will come either from revenues or borrowing.
The annual income collected from taxes by the government as a result of its sovereign powers. Typical revenues include individual and corporate income taxes, payroll taxes, value-added taxes, sales taxes, excise taxes.