Some important points about Budget.Budget is presented each year in parliament by the finance minister. The current budget has been presented by Arun jaitley in the parliament and this is a piece of paper which tells what the revenue sources are and what are the expenditures of the government for the whole financial year. A lot of candidates who are preparing for any examination should understand the budget and some useful terms which are related to it. It will help them understand these properly as in the examination concept related questions are also asked and if you are not very much clear with the concepts you will not be able to score good marks in the examination and here are some concepts released to the budget that the candidates should know. Railway budget in India is presented each year by Railway minister and union budget by the finance mister.
Some important terms in budget
The government can spend the money from 3 different types of funds which are known as consolidated funds, contingency funds and public account funds. Government can choose the account to spend the money based on the task involved. For example if it is deciding to spend on the public related task like in construction of roads and dams etc it will use the public account fund where the approval of parliament to use those funds is not required. It is generally the money of public which is generated through the taxes and it is spend on the public in this way only.
- Consolidated fund: government can spend form the consolidated fund on any task and for this the prior approval of the parliament is necessary to use the consolidated funds. Some of the officials in government are paid from the consolidated fund of the government. It is important to note that the consolidates fund cannot be directly used and the approval of parliament for any task related to it is necessary before utilizing the funds.
- Contingency funds: there funds are for the natural calamites etc and lies with the president of India. if they is any natural calamities for which the funds were not earlier allocated government can use the contingency funds to overcome the situations. To use the contingency funds the approval of the parliament is required.
- Public account: this is basically the money of public which is collected through various taxes imposed on the public. These are spending on the road constructions, dam construction and other tasks related to the interest of public. To use this fund, government is not needed to have the approval of parliament.
Types of expenditures:
- Revenue expenditure: this is a type of expenditure that the government spends on judiciary, maintaining law and order , routine administration, salaries, subsidies, pension etc on administrative staffs.
- Capital expenditure: these are the expenditure incurred on public related tasks like the dams, bridges & roads, and plants & machineries etc have been categorized as capital expenditure.
- Revenue receipts: these can have tax receipts and non tax receipts like that of stamp duties, fees, ÷nds etc.
- Capital receipts: these are the funds of governments which are recorded through various process. When the government lacks funds it raises the capital through the dis investment process or by selling the government securities in the public and raises its capital. The same capital is utilized in various government task including the payment to the debts which it has raised from the financial institutions and other foreign entities. It has been categories into the Capital receipts.
Type of deficits:
There are different types of deficit involved in the way how it is getting processed. They are:
- Revenue deficit: it is the difference of the revenue generated and the expenditure of the government in the current financial year.
- Fiscal deficit: it is the difference between the government expenditure and the total non debts receipts.
- Primary deficit:
Fiscal deficit of the government should not be more than 3% for any country. Currently India has more than 3 % of the fiscal deficit. Primary deficit is the fiscal deficit and the payment on debts which the government has been paying.