Budget Glossary

 
 
Appropriation Bill
A Bill presented to Parliament for approval providing for the withdrawal or appropriation by the
government from and out of the Consolidated Fund of India .
 
Bank credit
It includes loans, cash credit and overdrafts, and inland bills and foreign bills purchased and
discounted. Bills exclude those rediscounted .
 
Budget estimates
The estimates of government spending on various sectors during the year, together with an
estimate of the income in the form of tax revenues, form the Budget estimates.
 
Balance of Payment
Statement showing the country's trade and financial transactions (all economic transactions) in
terms of net outstanding receivable or payable from other countries with the rest of the world for a
period of time.
 
Bill
The draft of a legislative proposal which, when passed by both the Houses of Parliament and
assented to by the President, becomes an Act.
 
Budget Deficit
It is part of the fiscal deficit. It represents the borrowing requirement of the center.
 
Consolidated Fund
All revenues received by Government, the loans raised by it, and receipts from recoveries of loans
granted by it, form the Consolidated Fund.
 
Contingency Fund
Fund into which the Government dips its hands in emergencies, to meet urgent, unforeseen
expenditures and can't wait for authorization by Parliament.
 
Consumer price index
A price index covering the prices of consumer goods.
 
Corporate Tax
A tax on the profits of firms, as distinct from taxation of the incomes of their owners
 
Capital budget
The list of planned capital expenditures prepared usually annually
 
Current Account Deficit
An excess of expenditure over receipts on current account in a country's balance of payments.
 
Current Account Surplus
An excess of receipts over expenditure on current account in a country's balance of payments.
 
Customs Duty
A tax on imports, or tariff.
 
 
 
Disposable Income
Income less income tax.
 
Direct taxes
Taxes which affect the consumer directly, such as income tax, corporate tax, capital gains tax etc.
 
Disinvestment
The selling of the Government's stake in public sector undertakings.
 
DCF
Discounted cash flow.

 
 
Effective rate of interest
The percentage rate of return on an annual basis. It reflects the effect of intra-year compounding.
 
Excise duties
Levied on items manufactured within the country and are paid by the manufacturer.
 
Fiscal Deficit
It is the gap between center's receipts & payments.
 
Foreign Direct Investment
Investments of a company incorporated outside India either through a branch or a representative
office or through a subsidiary company set up in India.
 
Foreign institutional investor
FII is an institution established or incorporated outside India, which proposes to make investment in
India.
 
Gross Domestic Product (GDP)
The total of market value of the finished goods and services produced in the country in a given
year. It is made of three sectors Agriculture, Industry & Services.
 
 
 
Gross National Product (GNP)
The total market value of the finished goods and services produced in the country in a given year,
plus the income of domestic residents from investments made abroad, minus the income earned by
foreigners abroad from the domestic market.
 
Income Tax
Tax levied on individual income from various sources like salaries, investments, interest, etc.
 
Inflation
Inflation rate is the percentage rate of change in the price level.
 
Indirect taxes
Taxes which are charged on goods produced, imported or exported : Excise and Customs duties
 
Marginal tax rate
The tax rate applicable to income at the margin
 
Monetised Deficit
It is amount by which fiscal deficit is going to be financed by printing of currency.
 
M1
It is also called narrow money & includes currency with public (notes and coins in circulation less
cash in hand with banks), deposit money with public, and `other' deposits with RBI.
 
M3
It is also called broad money & includes M1 plus time deposits with banks. Time deposits exclude
inter-bank deposits.
 
National Debt
The total outstanding borrowings of the central government Exchequer. It is the debt owed by the
government as a result of earlier borrowing to finance budget deficits.
 
Primary Deficit
This is fiscal deficit minus interest cost.
 
Payback period
The length of time required for an asset to generate cash flows just enough to cover the initial
outlay.
 
Peak rate
The highest rate of Customs duty applicable on an item
 
Per Capita Income
The national income of a country, or region, divided by its population.
 
Performance budget
A budget prepared ex post-facto to compare actual results with costs that should have been
incurred at the actual level attained.
 
Portfolio
A combination of assets.
 
 
 
Progressive tax structure
A tax structure in which the marginal tax rate increases as the level of income increases.
 
Revenue Deficit
This is the gap between center's expenditure & revenue resources.
 
Reserve money
It refers to money supplied by RBI and Central government.
 
Revenue Expenditure
Revenue expenditure is for the normal running of the government’s department and various
services, interest charged on debt incurred by government, subsidies, etc.
 
Revenue Receipts
Revenue receipts consist of tax collected by the government and other receipts consisting of
interest and dividend on investments made by government, fees and other receipts for services
rendered by government.
 
Scheduled banks
banks, which are included in the second schedule to the Reserve Bank of India Act 1934.
Subsidies
Financial aid given by the Government to individuals or groups.
 
Sales Tax
A tax levied as a percentage of retail sales.
 
Tariff
A tax applied to imports.
 
Wholesale Price Index
The prices of goods, which are dealt with, wholesale, mainly bulk goods, which are mostly inputs to
production rather than finished commodities.