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New Delhi: There are many terms which you hear every year when the Budget is presented, but several people find it hard to understand the business terms like Finance bill, fiscal deficit, revenue deficit and more. Notably, these specific terms used in the Budget are very crucial and extremely significant as they affect your finances. The income tax rates, interest on loans are all dependent on these budgetary words. KIt also gives you the sense of the government spending on infrastructure and social welfare schemes.
Budget Estimate: This term refers to the income and expenditure estimated by the government for the financial year.
Fiscal Deficit: When the government's income is on the lower side and and expenditure increases, then it means that the government is in deficit, and this is called fiscal deficit.
Revised Estimate: When the government presents the estimates of income and expenditure made in the previous financial year after making changes in them, then it is called a revised estimate.
Finance Bill: After the Union Budget is presented, the government introduces the Finance Bill in Parliament. This bill mentions the details of government revenues.
Appropriation Bill: The Appropriation Bill is also introduced alongside the Finance Bill. It has the information related to central government expenditures.
Fiscal Surplus: If the income of the government exceeds its expenditure, then it is said that the Centre is making a profit. This is called a fiscal surplus.
Revenue Deficit: If the government fails to meet the earnings set by it, then it is called Revenue Deficit.
Tax: There are two types - direct and indirect. Direct taxes are those taxes which are collected directly from the public, such as income tax and corporate tax. Indirect taxes are those taxes collected through excise duty, service tax, and customs duty.
Income Tax: The tax levied on people’s earnings is called income tax. The income you earn and any interest earned on it is subject to income tax, if it falls within the tax bracket.
Corporate Tax: The taxes paid by corporations and companies on their earnings to the government is called corporate tax.
Excise Duty: The tax levied on goods manufactured in the country is called excise duty.
Custom Duty: Any goods that are imported from foreign countries or are being exported to other nations are charged a duty which is called customs duty.
Contingency Fund: In emergency situations, the government withdraws money from a separate set of funds which is kept secured for such situations. This Fund is called the Contingency Fund. The government does not require parliamentary approval for withdrawal.
Consolidated Fund: Whatever the government earns is deposited and this set of money is called the Consolidated Fund. The Centre is required to take parliamentary approval for withdrawal.
Revenue expenditure: The government spends money to run the country. It is used to pay salaries, provide loans, subsidies, and grants to state governments.
Capital expenditure: When the government generates revenue from the expenditures then this is called Capital Expenditure. The government uses these funds for investment or for construction of schools, colleges, roads, and hospitals.
Short Term Gain: If stock market investors buy equities and sell them on profits within a year, then it is called short term capital gain.
Long Term Gain: When you buy equities in the stock market and stay invested for more than a year and earn profit on it, it is called long term capital gain.
Disinvestment: When the government earns money by selling some shares of government companies, it is called disinvestment.
