As Union Budget Budget 2023 is just round the corner, it is important to understand the terminologies that are commonly used when discussing the country’s financial plans.
Let us discuss a few terms and concepts that you would likely come across when reading the budget:
To start let us first understand what Budget actually means!! – The Budget is a document released by the Indian government on 1st February each year (except the election year) which contains details about the projected receivables and payables of the government for a particular fiscal year (April 1 to March 31). This budget statement is divided into two major parts- capital budget and revenue budget. Capital budget talks about the government-related capital payment and receipts while the revenue budget accounts for all the revenue expenditure and receipts.
Now coming to some other terms:
Fiscal Deficit: The fiscal deficit is the difference between the Total revenue and Total expenditure of the government. It serves as an indicator of the government’s financial health. A deficit is generally financed by borrowing from either the central bank of the country (RBI in case of India) or by raising money from capital markets by issuing instruments like treasury bills and bonds.
Revenue Deficit: A revenue deficit is a shortage of Government’s funds to maintain daily affairs. It occurs when total non-developmental expenditure surpasses total revenue receipts
Capital Expenditure: Capital expenditure refers to spending to create long-term assets in the economy such as buildings, roads, and infrastructure.
Current Expenditure: Current expenditure is the money the government spends on day-to-day operations such as salaries, pensions, and subsidies.
Finance Bill: As the name suggests, Finance Bill is a bill that contains the financial plans of the government for the upcoming financial year. It is introduced in the Lok Sabha on the same day as that of Union Budget. The bill contains provisions for the government expenditures, government borrowings, revenues, etc.
Blue Sheet: The Blue Sheet is a document containing in-depth information about the budget and its expected impact. It is mostly released few days after the budget is announced and provides a more detailed look at the government’s financial plans.
According to the legal executives at D. Batra & Co. (DBC), the upcoming Union Budget for the Financial Year 2023-24 can bring some new changes for the salaried employees, uniformity in tax rates for corporates. Cryptos and Digital Money shall also remain a hot-topic in the Budget.
That is all for today!! We hope you were able to gather some new knowledge today which shall help you understand the upcoming budget in a better way.
Stay tuned for further details on Union Budget 2023!!