Economic glossary Union Budget Under Article 112 of the constitution, a statement of estimated receipts and expenditure, called the ‘Annual Financial Statement’, has to be placed before Parliament for each financial year. eco 2 This Statement is the main budget document. It is an estimate of the Government’s revenue and expenditure at the end of a fiscal year, which runs from April 1 to March 31. A Union Budget is the most comprehensive report of the Government’s finances, in which revenues from all sources and outlays to all activities are consolidated. The budget also contains estimates of the Government’s accounts for the next fiscal, called budgeted estimates. Capital Budget The capital budget consists of capital receipts and payments. Capital receipts are Government loans raised from the public, Government borrowings from the Reserve Bank and treasury bills, divestment of equity holding in public sector enterprises, loans received from foreign Governments and bodies, securities against small savings, State provident funds, and special deposits. Capital payments refer to capital expenditures on construction of capital projects and acquisition of assets like land, buildings machinery and equipment. It also includes investments in shares, and loans and advances granted by the Central Government to State Governments, Government companies, corporations and other parties. Revenue Budget The revenue budget consists of revenue receipts of the Government and its expenditure. Revenue receipts are divided into tax and non-tax revenue. Tax revenues constitute taxes like income tax, corporate tax, excise, customs, service and other duties that the Government levies. The non-tax revenue sources include interest on loans, dividend on investments etc.eco survey Revenue expenditure is the expenditure incurred on the day-to-day running of the Government and its various departments, and for services that it provides. It also includes interest on its borrowings, subsidies and grants given to State Governments and other parties. This expenditure does not result in the creation of assets. In case the difference between revenue receipts and revenue expenditure is negative, there is a revenue deficit. It shows the shortfall of the Government’s current receipts over current expenditure. If the capital expenditure and capital receipts are taken into account too, there will be a gap between the receipts and expenditure in a year. This gap constitutes the overall budgetary deficit, and it is covered by issuing 91-day Treasury Bills, mostly held by the Reserve Bank. Revenue surplus is the excess of revenue receipts over revenue expenditure.
Posted on: Mon, 11 Aug 2014 16:18:56 +0000