Subhash Chandra Garg

Public debt

Public debt falls to Rs 61 lakh crore at end of 2016-17: Government

Public debt per capita, Japan, US, UK, debt

Public debt dips marginally to Rs 55.73 lakh cr in Q4 FY16

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	Public debt is the total amount, including total liabilities, borrowed by the government to meet its development budget. It has to be paid from the Consolidated Fund of India. The term is also used to refer to overall liabilities of central and state governments, but the Union government clearly distinguishes its debt liabilities from the states&rsquo;.</div>
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	The central government broadly classifies its liabilities into two categories &mdash; debt contracted against the Consolidated Fund of India, and public account.</div>
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	Over the years, the Union government has followed a considered strategy to reduce its dependence on foreign loans in its overall loan mix. Internal debt constitutes over 93 per cent of the overall public debt. Internal loans that make up for the bulk of public debt are further divided into two broad categories &ndash; marketable and non-marketable debt.</div>
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	The sources of public debt are dated government securities (G-Secs), treasury bills, external assistance, and short-term borrowings.</div>
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	According to the Reserve Bank of India Act, 1934, the RBI is both the banker and public debt manager for the government. The RBI handles all the money, remittances, foreign exchange and banking transactions. The Union government also deposits its cash balance with the RBI.</div>
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	The Union government&rsquo;s liabilities account for a little over 46 per cent of India&rsquo;s gross domestic product (GDP). However, if the public debt is calculated as general government liabilities, which also includes the liabilities of states, this goes up to 68 per cent of the country&rsquo;s GDP.</div>
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What is Public debt, Public debt Definition, Public debt News

What is Public debt

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	Article 266 of the Constitution defines the Public Account as being those funds that are received on behalf of the Government of India.&nbsp;</div>
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	Money held by the government in a trust &mdash; such as in the case of Provident Funds, Small Savings collections, income of government set apart for expenditure on specific objects like road development, primary education, reserve/special Funds, etc &mdash; are kept in the Public Account. Public Account funds do not belong to the government and have to be finally paid back to the persons and authorities that deposited them.&nbsp;</div>
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	Parliamentary authorisation for such payments is not required. However, when money is withdrawn from the Consolidated Fund with the approval of Parliament and kept in the Public Account for expenditure for a specific purpose, it is submitted for a vote in Parliament.</div>
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	There are five major heads of accounts under the Public Account &mdash; (i) Small Savings, Provident Fund and Other Accounts (ii) Reserve Funds (iii) Deposits and Advances (iv) Suspense and Miscellaneous and (v) Remittances.</div>
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What is Public Account, Public Account Meaning, Public Account definition, Budget News

Public Account

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	A country&rsquo;s fiscal balance is measured by its government&rsquo;s revenue vis-a-vis its expenditure in a given financial year. Fiscal deficit, the condition when the expenditure of the government exceeds its revenue in a year, is the difference between the two. Fiscal deficit is calculated both in absolute terms and as a percentage of the country&rsquo;s gross domestic product (GDP).</div>
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	The fiscal deficit of a country is calculated as a percentage of its GDP or simply as the total money spent by the government in excess of its income. In either case, the income figure includes only taxes and other revenues and excludes money borrowed to make up the shortfall.</div>
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	In her maiden Union Budget, Finance Minister Nirmala Sitharaman had revised the government&rsquo;s fiscal deficit target for 2019-20 to 3.3 per cent of GDP, 10 basis points lower than the target for the previous financial year.</div>
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	<strong>How is fiscal deficit calculated?</strong></div>
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	The fiscal deficit, in mathematical terms, is [total revenue generated &mdash; total expenditure]. The total revenue is the sum of revenue receipts, recovery of loans and other receipts of the government.</div>
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	While most countries continue to project a deficit in their economies, a surplus is a rare phenomenon. A high deficit at times also emerges if the government is spending on developmental works like construction of highways, ports, roads, airports which will later generate revenue for the government.</div>
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	<strong>What are components of the fiscal deficit calculation?</strong></div>
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	The fiscal deficit calculations are based on two components &mdash; income and expenditure.</div>
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	Income component: The income component is made of two variables, revenue generated from taxes levied by the Centre and the income generated from non-tax variables. The taxable income consists of the amount generated from corporation tax, income tax, Customs duties, excise duties, GST, among others. Meanwhile, the non-taxable income comes from external grants, interest receipts, dividends and profits, receipts from Union Territories, among others.</div>
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	Expenditure component: The government in its Budget allocates funds for several works, including payments of salaries, pensions, emoluments, creation of assets, funds for infrastructure, development, health and numerous other sectors that form the expenditure component.</div>
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	<strong>How is fiscal deficit balanced out?</strong></div>
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	While a rising deficit is a challenge for the government in the long term, to balance it out in short-term macroeconomics, the government looks at market borrowings by issuing bonds and selling them in through banks. Banks buy these bonds with currency deposits and then sell them to investors. Government bonds are considered an extremely safe investment instrument, so the interest rate paid on loans to the government represents risk-free investment.</div>
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	The government also sees a deficit situation as an opportunity to expand policies and schemes, including welfare programmes, without having to raise taxes or cut spending in the Budget.</div>

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What is Fiscal Deficit, Fiscal Deficit News, Budget 2020 News, Fiscal Deficit Calculation

Fiscal Deficit

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	Other than taxation being a primary source of income, the government also earns a recurring income, which is called non-tax revenue. While sources of tax revenue are few, the sources of non-tax revenue are many, with the number of collections per source. Although there are many sources of non-tax revenue, the amount per source is much less than that for tax revenue.</div>
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	For example, when citizens use services offered by the government, they pay bills, which are categorised as non-tax revenue, as the government provides infrastructure support to implement the services. Non-tax revenue also includes the interest collected by the government on the loans or funds offered to states.</div>
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	The difference between tax revenue and non-tax revenue is that the former is charged on income earned by an entity, which is a direct tax and on the value of transaction of goods and services, which falls under indirect tax.</div>
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	On the other hand, non-tax revenue is charged against services provided by the government. It is mandatory to pay a part of the income generated and the amount of goods and services consumed as tax. However, non-tax revenue becomes payable only when services offered by the government are availed of.</div>
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	There are various services provided by the government that become sources of non-tax revenue, such as police services, electricity, municipal services, etc. These sources become a medium of non-tax revenue for the state government concerned.</div>

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What is Non-Tax Revenue, Non-Tax Revenue News, Budget News, Non-Tax Revenue Receipts

Non-Tax Revenue

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	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.</div>
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	The current account includes net income, including interest and dividends, and transfers, like foreign aid.</div>
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	India&rsquo;s current account position is largely on the deficit side because of the country&#39;s dependence on oil imports. In the quarter ended September 2019, the country&#39;s CAD stood at $6.3 billion.</div>
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	<strong>What is Current Account and how is it different from Balance of Trade?</strong></div>
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	For a clear understanding of CAD, it&#39;s essential to learn about the current account. Quite similar to the balance of trade, current account maintains a record of the country&#39;s transactions with other nations.</div>
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	However, the two terms are technically different. While the balance of trade measures only the gap in earnings and expenditure on exports and imports of goods and services, current account also factors in payments from domestic capital deployed overseas.</div>
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What is Current Account Deficit (CAD), Current Account Deficit Definition, CAD News

Current Account Deficit (CAD)

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	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. Revenue receipts can be of two types &mdash; non-tax revenue and tax revenue. Tax revenue is the income gained by the government through taxation.</div>
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	Tax revenue forms a part of the Receipt Budget, which in turn is part of the Annual Financial Statement of the Union Budget.</div>
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	Tax revenue is the result of the application of a tax rate to a tax base. Total tax revenue as a percentage of GDP indicates the share of the country&#39;s output collected by the government through taxes. Tax revenue can be regarded as one measure of the degree to which the government controls the economy&#39;s resources.</div>
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	Taxes collected from both direct tax and indirect tax are the government&rsquo;s tax revenue. It includes collections from income tax, corporation tax, customs, wealth tax, tax on land revenue, etc.</div>
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	Direct tax is the tax that is paid directly to the government by the person or company on whom it is levied. Income tax, wealth tax, corporation tax and property tax are some examples of direct tax. Indirect taxes are those that are collected by intermediaries from individuals and corporations who bear the burden of the tax and passed on to the government. Goods and Services Tax (GST) is an example of indirect tax. Corporation tax forms a large chunk of the government&rsquo;s tax revenue.</div>
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What is Tax revenue, Tax revenue Definition, Tax revenue News

Tax Revenue

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	Government revenue refers to all the income of the government from taxes and non-tax sources. These funds are used for government expenditure. Government revenues and spending are an important part of fiscal policy of the government.</div>
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	Revenue refers to all the receipts of the government from taxes, custom duties, revenue from state-owned enterprises, capital revenues and foreign aid.</div>
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	<strong>Revenue is generated from mainly two types of sources:</strong></div>
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	<strong>Tax revenue</strong>: Taxes on incomes of individuals and corporations and also on the goods and services produced.</div>
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	<strong>Non-tax revenue:</strong> Dividends from state-run companies, central bank revenue and capital receipts in the form of external loans and debts from international financial institutions.</div>
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	India&rsquo;s total revenue in the April-November quarter of FY20 increased 12.9 per cent to Rs 10.12 trillion. It was 8.97 trillion in the same period in FY19.</div>
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	Government revenues averaged Rs 3.09 trillion from 1997 until 2019, touching an all-time high of Rs 16.66 trillion in March 2019.</div>
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Page 3 - Latest Updates on Public debt

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Public debt falls to Rs 61 lakh crore at end of 2016-17: Govt

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Public debt dips marginally to Rs 55.73 lakh cr in Q4 FY16