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Budget Glossary: 10 Terms To Know Before The Union Budget Presentation
- Fiscal Deficit: Fiscal deficit happens when the government's spending exceeds its non-borrowed income during the fiscal year. This indicates the total amount of borrowing needed by the government.
- Revenue Deficit: Revenue deficit is the difference between the government's spending on day-to-day operations and its total income from taxes and other sources. It is an important measure of the government's financial health, indicating that its income is insufficient to cover its expenses. When a revenue deficit occurs, the government must borrow money to make up the difference.
- Tax Revenue: Tax revenue is the amount of money collected by the government from taxes on income, profits, and the consumption of goods and services. This includes both direct and indirect taxes. Tax revenue is the primary source of government income.
- Direct Tax: Direct tax is a type of tax that is imposed on the income of individuals and businesses. In this case, the person who pays the tax and the person on whom the tax is imposed are the same. Examples of direct taxes include income tax, corporate tax, property tax, and inheritance tax.
- Indirect Tax: Indirect tax is a type of tax that is imposed on goods and services. In this case, the person paying the tax and the person on whom the tax is imposed are different. Examples of indirect taxes include GST, customs duty, and central excise.
- Gross Domestic Product (GDP): GDP (Gross Domestic Product) is a measure of the monetary value of all goods and services that are intended for final consumption and produced within a country's borders in a specific period of time (such as a quarter or a year). It takes into account all the output produced within a country during that period.
- Inflation: Inflation refers to the rate at which the overall cost of goods and services in an economy is rising.
- Customs Duty: Customs Duty is a type of indirect tax imposed on the import and export of goods in or out of a country. The cost of this tax is typically passed on to the end consumer of the goods.
- Fiscal Policy: Fiscal policy refers to the actions taken by the government to manage its spending and revenue collection (through taxes) to achieve its economic objectives.
- Consolidated Fund: The Consolidated Fund of India is a crucial government account that includes revenues received and expenses incurred during a financial year, with the exception of exceptional expenses such as disaster management. All non-exceptional government expenditure is made from this fund.