Key Terms of Budget

Guide to understand Budget 2021
(For Apr 2021 to March 2022)

The budget is also known as the annual financial statement, which is presented by the government to highlight its expenditure and receipts.

* Revenue expenditure (Income statement expenditure)

* Capital expenditure (Exp on acquiring, maintaining or upgrading physical assets)

* Current Account Deficit (Value of imported goods/services >the value of exports)

* Revenue deficit (The government’s net income or revenue generation < projected net income, a revenue deficit occurs). The excess of disbursements over receipts on revenue account is called revenue deficit.

* Revenue surplus (The net realised income or revenue generation is more > projected net income)

* Inflation (Inflation is a quantitative measure of the rate at which select products and services in an economy are increased over a certain period of time)

* Fiscal policy (Blueprint of estimated taxation and government spending).

* Fiscal deficit (It is basically the difference between total revenue and total expenditure of the government.) When the government’s non-borrowed receipts fall short of its entire expenditure, it has to borrow money from the public to meet the shortfall. The excess of total expenditure over total non-borrowed receipts is called the fiscal deficit.

* Divestment (Sell of existing Assets)

* Customs Duty (when certain goods are imported into/exported out of the country)

* Household Income: 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.

* Direct Tax: It refers to the tax that is levied directly on personal income. Traditionally, these are taxes where the burden of tax falls on the person on whom it is levied. These are largely taxes on income or wealth.

* Indirect Tax: Indirect taxes are paid by consumers when they buy goods and services. In case of indirect taxes, the incidence of tax is usually not on the person who pays the tax. These are largely taxes on expenditure and include Customs, excise and GST.

What is your expectations from FM Nirmala Sitharaman’s second Budget (Budget 2021)?