As Budget 2024 is around the corner, it is important to be well-informed about the key terms and concepts that will be discussed during this important event. Here's a glossary of terms you need to know during budget discussions.
New Delhi: The central government is all set to present the interim budget for the financial year 2024-25 on February 1, 2024. The full budget for the next financial year, FY25, will be presented in July after the formation of the new government after the general elections. , Union Finance Minister Nirmala Sitharaman, while addressing the CII Global Economic Policy Forum 2023 Summit on December 7, said there are unlikely to be any “spectacular announcements” in the Union Budget 2024 to be presented on February 1.
As Budget 2024 is around the corner, it is important to be well-informed about the key terms and concepts that will be discussed during this important event. Whether you are an economist, a business owner, or simply a concerned citizen, it is essential to understand these terms to understand the implications of the budget on different sectors of the economy.
Here, we'll provide a glossary of terms you need to know during budget discussions.
Fiscal deficit: It shows the difference between the total expenditure of the government and its total revenue. A high fiscal deficit indicates that the government is spending more than it earns, which can have a long-term impact on the country's economy. For example: When the non-borrowed receipts of the government fall short of its overall 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 fiscal deficit.
monetary policy:
The term refers to actions taken by the central bank to control the money supply and interest rates in the economy. Monetary policy decisions can affect inflation, economic growth, and employment levels.
Direct Taxes:
These are taxes that are imposed directly by the government on individuals or businesses. Examples of direct taxes include income tax, corporate tax, and wealth tax.
Indirect Taxes:
Unlike direct taxes, indirect taxes are not imposed directly on individuals or businesses. Instead, they are imposed on goods and services. Examples of indirect taxes include Goods and Services Tax (GST), customs duty and excise duty.
Revenue Expenditure:
It refers to the regular expenses of the government, such as salaries, pensions and interest payments. Revenue expenditure does not result in the creation of assets or investment.
Capital expenditure:
Unlike revenue expenditure, capital expenditure is incurred to create assets or investments that yield long-term benefits. Examples of capital expenditures include investments in infrastructure, education, and health care.
Subsidy:
Subsidy is financial assistance provided by the government to individuals or businesses to promote a particular sector or activity. Subsidies may be in the form of direct cash transfers, lower tax rates or grants.
inflation:
Inflation refers to a sustained increase in the general price level of goods and services in an economy over a period of time. High inflation can erode the purchasing power of a currency and affect the overall economy.
Gross domestic product (GDP:
Gross domestic product (GDP) is a measure of the total value of goods and services produced within a country's borders over a specific time period. It is often used as an indicator of a country's economic performance.
Deficit Financing:
The term refers to the practice of financing a government's fiscal deficit by borrowing from various sources, such as issuing bonds or obtaining loans from international organizations.
Goods and Services Tax, GST:
The Constitution defines “goods and services tax” to mean any tax on the supply of goods, or services or both, other than taxes on the supply of alcoholic liquor for human consumption. “Goods” means movable property of every description other than money and securities but including an actionable claim. “Services” means anything other than goods, money and securities, but includes activities relating to the use of money or its conversion into cash or any other manner.
Ultimately, becoming familiar with these key terms and concepts will enable you to better understand and analyze budget discussions. It is important to stay informed and involved in the budget process as it directly affects the economic outlook of the country. So, buckle up and get ready for Budget 2024!
