As the Budget 2024 is just around the corner, it is important to be well-informed about the key terms and concepts that will be discussed during this crucial event. Here, is a glossary of words that you must know to navigate through the budget discussions.
New Delhi: The central government is all set to present the interim Budget for fiscal 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 post the General Elections. Union Finance Minister Nirmala Sitharaman while addressing CII Global Economic Policy Forum 2023 Summit on December 7 said that the Union Budget 2024 scheduled to be presented on February 1 is unlikely to make any “spectacular announcements”.
As the Budget 2024 is just around the corner, it is important to be well-informed about the key terms and concepts that will be discussed during this crucial event. Whether you’re an economist, a business owner, or simply a concerned citizen, understanding these terms is essential to comprehend the implications of the budget on various sectors of the economy.
Here, we will provide a glossary of words that you must know to navigate through the budget discussions.
Fiscal Deficit: It refers to the difference between the government’s total expenditure and its total revenue. A high fiscal deficit indicates that the government is spending more than it is earning, which can have long-term implications on the country’s economy. Eg: When the govt’s non-borrowed receipts fall short of its entire expenditure, it has to borrow money form the public to meet the shortfall. The excess of total expenditure over total non-borrowed receipts is called the Fiscal defcit.
Monetary Policy:
This term refers to the actions taken by the central bank to control the money supply and interest rates in the economy. The monetary policy decisions can influence inflation, economic growth, and employment levels.
Direct Taxes:
These are taxes that are directly levied on individuals or businesses by the government. Examples of direct taxes include income tax, corporate tax, and wealth tax.
Indirect Taxes:
Unlike direct taxes, indirect taxes are not directly levied 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:
This refers to the government’s regular expenses, such as salaries, pensions, and interest payments. Revenue expenditure does not result in the creation of assets or investments.
Capital Expenditure:
Unlike revenue expenditure, capital expenditure is incurred for the creation of assets or investments that yield long-term benefits. Examples of capital expenditure include investments in infrastructure, education, and healthcare.
Subsidy:
A subsidy is a financial assistance provided by the government to individuals or businesses to promote a particular sector or activity. Subsidies can be in the form of direct cash transfers, reduced tax rates, or grants.
Inflation:
Inflation refers to the 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 the 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 in a specific time period. It is often used as an indicator of a country’s economic performance.
Deficit Financing:
This term refers to the practice of financing the government’s fiscal deficit through 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” means any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption. “goods” means every kind of movable property other than money and securities but includes actionable claim. “Services” means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode.
In conclusion, being familiar with these key terms and concepts will enable you to better understand and analyze the budget discussions. It is important to stay informed and engaged in the budget process as it directly affects the economic landscape of the country. So, gear up and get ready for Budget 2024!