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8/7/2019 Budget Terminologies
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Union BudgetUnion Budget -- TerminologiesTerminologies
BY
8/7/2019 Budget Terminologies
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Overview
Introduction
Budgetary Estimates
Revised Estimates
Budget Deficit
Revenue Deficit
Fiscal Deficit
Current Account Deficit
Fiscal Consolidation
GDP growth vis-à-vis Credit Growth
Questions
8/7/2019 Budget Terminologies
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What is Budget?
Is a list of all planned expenses and revenues.
Is a plan of savings & spending.
It is derived from French µbougote¶ meaning purse.
First General Budget was announced on November 26, 1947.
Budget comprises data for three years
Actual figures for the preceding year.
Budget Estimates for the current year.
Revised Estimates for the current year.
Budget estimates for the following year
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Budgetary Estimates
Used for cost estimates at an early stage.
When there is some limited information and or some info
is not available.
It is like an initial estimation to begin with.
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Revised Estimates
It is a change in the estimate of the budget, when the budget period
is in force.
Subject to both exogenous and endogenous factors.
Includes information not available at the time of Budgetary Estimate.
Subject to scrutiny and potential alteration.
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Budget Deficit
Difference between public spending (expenditure) and
revenues(receipts).
For a particular year, it is the total of fiscal deficit for the
year plus the past debt accumulated.Debt is an accumulation of yearly deficits.
It is the net sum of all past deficit/surplus if any over the
years
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Tax Revenues
Non Tax revenues
Recovery of loans
Pub Sec Disinvestments
Rev Receipts
Capital
Receipts
Total GovtReceipts
Budget Deficit
Government Receipts
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Revenue Deficit
What is revenue?
Tax Revenue
Non Tax Revenue
What is Revenue Deficit?What is Revenue Surplus?
What is Revenue Expenditure?
Effective Revenue Deficit .
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Revenue Deficit
Item Rs. In Crores
Revenue Receipts in 2011-12 789892
Revenue Expenditure 1097162
Revenue Deficit 307270
Revenue Expenditure on A/c of Grant
for Creation of Capital Assets
146853
Effective Revenue Deficit 160417
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Fiscal Deficit
It is an economic phenomenon, where the Governments
total expenditure surpasses the revenue generated.
It is the difference between the Government¶s total
receipts excluding the borrowings and total expenditure,i.e. Total Gov. Exp ± Revenue Receipts + Non Debt
Capital Receipts.
Revenue Receipts includes
Tax Revenue receipts
Non Tax Revenue receipts
Non Debt Capital Receipt includes
Disinvestment
Dividends from PSEs.
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Fiscal Deficit
Fiscal Year 2010-11 BudgetEstimates
2010-11 RevisedEstimates
2011 -12 BudgetEstimates
Rs. In Crores 381408 400998 412817
Percentage of
GDP
5.5 5.1 4.6
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Current Account Deficit
Current Account is of two parts ± Trade Account &
Invisible Account.
Trade Account ± Balance from Import and Exports of
Merchandise only.Invisible Account ± Consists of 3 components ±
Services, Investment Income, Transfer Payments.
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Current Account Deficit
It is the difference between the components of the
Current Account in exports and imports, where imports
are more than exports.
The Country becomes a debtor to other countries.More money is paid out, than what is being brought into
the country.
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Current Account Deficit
Major Items of India's Balance of Payments as of Sept 2010 In US $ Billion
Item April ± June July ± September
2009-10 2010-11 2009-10 2010-11
1. Exports 39.20 56.30 43.4 54.30
2. Imports 65.40 87.80 73.00 89.60
3. Trade
Balance (1-
2)
-26.30 -31.60 -29.60 -35.40
4. Invisibles 22.10 19.40 20.40 19.60
5. Current A/cBalance
(3+4)
-4.20 -12.10 -9.20 -15.80
6. Capital A/c
Balance
4.30 15.90 18.60 19.00
PR = Partially Revised, P = Preliminary
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Current Account Deficit
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Fiscal Consolidation
A conscious policy of the Government to live within its
means.
It is a long term process, a road map and is not a single
budget announcement.Efforts to raise revenues.
Bring down wasteful expenditure.
Fiscal Responsibility and Budget Management Act 2003
(FRBM Act)Target for states to eliminate revenue deficits and fiscal
deficit 3% of State GDP for 2014-15, as per 13th Finance
Commission.
Public Debt Management Agency Bill to be introduced.
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