Budget Glossary Final

Glossary of Important Terms used in
Union Budget
Friday, March 18, 2022 1

The Union Budget is a statement of the estimated
receipts and expenditure of the government for that
particular year.
WH A T I S
?
The Union Budget also referred to as the
annual financial statement
Components of Government Budget

What is Revenue Receipts?
 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 & other duties.
What is
?
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.

What Is Tax Revenue?
 Taxation is the primary source of income for
the government.
 The most important revenue receipts for the
government.
 Taxes are involuntary fees levied on individuals

and corporations to finance government
activities.
 Tax revenue is the income gained by the
government
Friday, March 18, 2022
through taxation. 6
What Is Non Tax Revenue?
 Other than taxation being a primary source of
income.
 non-tax revenue is charged against services
provided by the government.
There are various services provided by the

government that become sources of non-tax
revenue, such as police services, electricity,
municipal
services, etc. 7
What Is Plan Expenditure ?
• Plan expenditure pertains to the money set aside

for productive purposes like various projects of
ministries.
• It is spent on productive asset creation through
Centrally-sponsored programmes and flagship
schemes.

What Is
What IsNon-
Non-Plan Expenditure ?
Plan Expenditure ?
Non-plan expenditure is what the

government spends on the so-
called non-productive areas and is
mostly obligatory in nature. It
includes salaries, subsidies, loans
and interest.

What is Capital Budget?
 Capital Budget consists of capital receipts (like
disinvestment, borrowing, loans from public or
foreign governments, Reserve Bank of India, etc)
and capital expenditure (like expenditure on
development of machinery, health facilities, etc).

What is Capital Receipts?
 Capital receipts are loans taken by the government

from the public, borrowings from foreign countries
and institutes, and borrowings from the RBI.
 Recovery of loans given by the Centre to states and
others is also included in capital receipts.
 The capital receipt has a nature of non-recurrence
What is
?
 Capital expenditure is the money spent by the

government on the development of machinery,
equipment, building, health facilities, education etc.
 It also includes the expenditure incurred on
acquiring fixed assets like land and investment by
the government that gives profits or dividend in
future.
Wha
t is
?
 It is the difference between all receipts and
expenses in both revenue and capital account of the
government. It means the government has spent
more money that it earned in a financial year.
What is
?
Fiscal deficit, is the condition when the
expenditure of the government exceeds its
revenue in a year.
What is Balance Budget?
Budgets in which
revenues are equal to
Income expenditures are referred Expenditure
to as "balanced budget".
It means there is neither a budget deficit nor a

budget
Friday, March surplus.
18, 2022 15
WHAT IS
Direct taxes are levied on the incomes of

individuals and corporations.
For example, income tax, corporate tax, etc..
What is Income Tax ?
It refers to the tax that is levied directly on

personal income.

What is Indirect Tax ?
Indirect taxes are paid by consumers when they

buy goods and services. These include excise
duty, customs duty etc.

What is Custom duty ?
 It is the tax that is levied on import and

export of goods.
 The government uses this duty to raise its
revenues, safeguard domestic industries, and
regulate movement of goods.

What is Excise duty ?
 Excise duty is a form of tax imposed on goods

for their production, licensing and sale.
 Today, excise duty applies only on petroleum
and liquor.

What is Cess ?
A cess is a form of tax levied by the government on tax

with specific purposes till the time the government gets
enough money for that purpose..
For example, the Swachh Bharat cess is levied by the
government for cleanliness activities that it is undertaking
across India.

What is Surcharge ?
A surcharge or additional charge is essentially a tax levied

on a tax.
It is calculated on payable tax, not on income generated.

What Is Long-term Capital Gains Tax; LTCG ?
 Capital gains mean the profit earned by an individual
on the sale of his investment in assets such as stocks,
real estate, bonds, commodities, etc.
 Basically, it is the 'gain' made on 'capital investment'.
 capital gains are taxed if an individual sells an asset
after holding it for a certain 'long' period.
 This period is often twelve months. However, it could
also be defined differently for various assets.

What Is Short-term Capital Gains Tax; LTCG ?
 Short-term capital gain tax (STCG) is a tax levied on

capital gains from the sale of an asset held for a short
period.
 If a capital asset is sold within government-defined
short-term holding period, gains from it are known as
short-term capital gains.'.

What Is Short-term Capital Gains Tax; LTCG ?
 Short-term capital gain tax (STCG) is a tax levied on

capital gains from the sale of an asset held for a short
period.
 If a capital asset is sold within government-defined
short-term holding period, gains from it are known as
short-term capital gains.'.

What Is Gross Domestic Product (GDP) ?
 Gross Domestic Product (GDP) is the final

monetary value of the goods and services
produced within the country during a specified
period of time, normally a year.
 In simple terms, GDP is the measure of the
country's economic output in a year.
 In India, contributions to GDP are mainly divided into
three broad sectors — agriculture, industry, and services

WHAT IS
?
 Gross National Product (GNP) is the total value of
all finished goods and services produced by a
country’s citizens in a given financial year,
irrespective of their location.
 GNP also measures the output generated by a
country’s businesses located domestically or
abroad

What Is Divestment Or Disinvestment?
 Divestment or disinvestment means selling a stake in a

company, subsidiary or other investments.
 Businesses and governments resort to divestment
generally as a way to pare losses from a non-performing
asset, exit a particular industry, or raise money.

What Is Current Account Deficit (CAD)?
 Current Account Deficit (CAD) is the shortfall

between the money received by selling products to
other countries and the money spent to buy goods
and services from other nations.
 If the value of goods and services we import exceeds
the value of those we export, the country is said to
be in a deficit, and the difference in the two values
is CAD.

What Is Balance Of Payments (BOP) ?
 The balance of payments (BoP) records all economic
transactions in goods, services, and assets of the
country with the rest of the world for a specified
time period, usually a year.
 BoP is used to monitor all international monetary
transactions

What Is Wholesale Price Index (WPI) ?
 The Wholesale Price Index (WPI) reflects changes in the
average prices of goods at the wholesale level — that is,
commodities sold in bulk and traded between
businesses or entities rather than goods bought by
consumers.

What Is Wholesale Price Index (WPI) ?
 A wholesale price index (WPI) is an index that measures and tracks
the changes in the price of goods in the stages before the retail
level.
 WPI refers to goods that are sold in bulk and traded between
entities or businesses (instead of between consumers)

What Is Consumer Price Index (CPI) ?
 The CPI measures the average change in prices over
time that consumers pay for a basket of goods and
services.
 Consumer Price Index (CPI) measures the changes over
time in general level of prices of goods and services that
households acquire for the purpose of consumption.

t is
h a
W
?
 The survey is a detailed report of the country's
economic performance during the past one year.
 It is basically an assessment of the progress of the
economy over the 12-month period.

WHAT IS ?
Financial inclusion is the process of ensuring access to financial

products and services needed by vulnerable groups at an
affordable cost in a transparent manner by institutional players.
Financial inclusion is a method of offering banking and
financial services to individuals.
It aims to include everybody in society by giving them basic
financial services regardless of their income or savings.
Fiscal policy refers to the use of government spending and
tax policies to influence economic conditions.
Fiscal policy, in simple terms, is an estimate of taxation
and government spending that impacts the economy.

What is Foreign Direct Investment(FDI) ?
A foreign direct investment (FDI) is an investment made by

a firm or individual in one country into business interests
located in another country.
Foreign direct investments (FDI) are investments made by
one company into another located in another country.
What is Foreign
Portfolio
Investment (FPI) ?
Foreign portfolio investment (FPI) consists of securities

and other financial assets held by investors in another
country.
Foreign portfolio investment is the purchase of securities
of foreign countries, such as stocks and bonds, on an
exchange.
What is Foreign Institutional Investor
(FII) ?
A foreign institutional investor (FII) is an investor or

investment fund investing in a country outside of the one
in which it is registered or headquartered.
A foreign institutional investor is an investor in a
financial market outside its official home country.
What is Tax Deducted at Source (TDS)?
As per the Income Tax Act, any company or person making a

payment is required to deduct tax at source if the payment exceeds
certain threshold limits.
TDS has to be deducted at the rates prescribed by the tax
department.
What is Tax Collected at Source (TDS)?
Tax collected at source (TCS) is the tax payable by a

seller which he collects from the buyer at the time of
sale.

What do you meant by Public Sector Undertaking (PSU)?
A state-owned enterprise in India is called a Public Sector

Undertaking (PSU) or a Public Sector Enterprise.
These companies are owned by the union Government of India
or one of the many state or territorial governments or both
together in parts.
The company stock is majority-owned by the government in a
PSU.
THANK YOU

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Glossary of Important Terms used in

Friday, March 18, 2022 1

Friday, March 18, 2022 3

 The revenue budget consists of revenue receipts of the

Friday, March 18, 2022 5

 Taxes are involuntary fees levied on individuals

There are various services provided by the

• Plan expenditure pertains to the money set aside

Friday, March 18, 2022 8

Non-plan expenditure is what the

Friday, March 18, 2022 9

Friday, March 18, 2022 10

 Capital receipts are loans taken by the government

 Capital expenditure is the money spent by the

It means there is neither a budget deficit nor a

Direct taxes are levied on the incomes of

It refers to the tax that is levied directly on

Friday, March 18, 2022 17

Indirect taxes are paid by consumers when they

Friday, March 18, 2022 18

 It is the tax that is levied on import and

Friday, March 18, 2022 19

 Excise duty is a form of tax imposed on goods

Friday, March 18, 2022 20

A cess is a form of tax levied by the government on tax

Friday, March 18, 2022 21

A surcharge or additional charge is essentially a tax levied

Friday, March 18, 2022 22

 Capital gains mean the profit earned by an individual

on the sale of his investment in assets such as stocks,

real estate, bonds, commodities, etc.

 Basically, it is the 'gain' made on 'capital investment'.

 capital gains are taxed if an individual sells an asset

after holding it for a certain 'long' period.

 This period is often twelve months. However, it could

also be defined differently for various assets.

 Short-term capital gain tax (STCG) is a tax levied on

Friday, March 18, 2022 24

 Short-term capital gain tax (STCG) is a tax levied on

Friday, March 18, 2022 25

 Gross Domestic Product (GDP) is the final

Friday, March 18, 2022 26

Friday, March 18, 2022 27

 Divestment or disinvestment means selling a stake in a

Friday, March 18, 2022 28

 Current Account Deficit (CAD) is the shortfall

Friday, March 18, 2022 29

 The balance of payments (BoP) records all economic

transactions in goods, services, and assets of the

country with the rest of the world for a specified

time period, usually a year.

 BoP is used to monitor all international monetary

Friday, March 18, 2022 30

 The Wholesale Price Index (WPI) reflects changes in the

average prices of goods at the wholesale level — that is,

commodities sold in bulk and traded between

businesses or entities rather than goods bought by

Friday, March 18, 2022 31

 A wholesale price index (WPI) is an index that measures and tracks

entities or businesses (instead of between consumers)

Friday, March 18, 2022 32

 The CPI measures the average change in prices over

time that consumers pay for a basket of goods and

 Consumer Price Index (CPI) measures the changes over