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Reserves: Funds held against future contingencies, normally a combination
of convertible foreign currency, gold, and SDRs. Official reserves are to ensure
that a government can meet near term obligations. They are an asset in the
balance of payments.
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Revenue expenditure: Meant for the normal running of government
departments and various services, interest charges on debt incurred by the
government and subsidies. Broadly speaking, expenditure which does not result in
creation of assets is treated as revenue expenditure. All grants given to state
governments and other parties are also treated as revenue expenditure even
though some of the grants may be for creation of assets.
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Revenue receipt: Includes proceeds of taxes and other duties levied by
the Centre, interest and dividend on investments made by the government, fees
and other receipts for services rendered by the government.
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Revenue Budget: Simply put, this shows the revenue receipts (tax and
non-tax) of the government and the expenditure met from these. Revenue
expenditure is for the normal running of government departments and various
services, interest charges on debt incurred by government, subsidies, etc. All
grants to state governments and other parties are also treated as revenue
expenditure even though some of them may be for creation of assets.
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Recession: Fall in the country's economic activity, for at least two
consecutive quarters, as shown in a lowering of the GDP. Not as serious as
depression.
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Sales tax: It is levied on the sale of a commodity which is produced or
imported and sold for the first time. If the product is sold subsequently
without being processed further, it is exempt from sales tax.
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Service tax: A service tax at the rate of 5 per cent has been levied
on services of telephones, insurance (other than life insurance) and stock
brokers.
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Subsidy: A payment by a government to a firm or household that provides
or consumes a commodity i.e the consumer pays only a part of the economic cost
of the product.
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Surcharge: It is a charge on the tax.
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Supplementary grant: Whenever the government desires to incur extra
expenditure, a Supplementary estimate is laid before the Parliament for its
sanction. If some money has been spent on any service during a financial year in
excess of the amounts granted for that service and for that year, the Minister
of Finance/Railways presents a Demand for Excess Grant.
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Tariff: A levy or tax imposed upon each unit or a commodity imported into
the country.
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Value-added Tax (VAT): A tax levied upon a firm as a percentage of its
value added to avoid the multiplying effect of taxes as the product passes
through different stages of production. The tax is based on the difference
between the value of the output over the value of the inputs used to produce it.
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Vote-on-account: The discussions on the budget proposals take a lot of
time. So this is an interim arrangement where the Lok Sabha is authorised to
grant a vote on account to the government to meet the necessary expenditure on
various items till the budget proposals are cleared by the Lok Sabha. It
normally covers the expenditure requirement of the government for two months.
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Venture capital finance: It is the capital provided by firms of
professionals who invest in sunrise companies which have potential for high
growth. The management of such companies have a new, revolutionary idea which is
not tried and tested, so are unable to get funding from traditional.
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Zero-based Budgeting: Zero base means that the justification of every
fund outlay shall have to be provided afresh. If a fund outlay in a particular
programme/project is found to be justified, its minimum/base level will be fixed
as a percentage (say 80 per cent) of the current year's budget, on the
assumption that inefficiencies and/or scope of budget reduction may exist in
marginal cases only (say, the balance 20 per cent). The current budget - the
historical data - is taken as the point of reference.
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- MajorGainZ.com
