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Budget Glossary

  • Acts regulated by the Finance Bill

    Generally, the Finance Bill makes amendments to existing rules and laws regarding taxes, government expenditure, financial policy, etc. As a result, laws suc...

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  • Annual Financial Statement

    The Annual Financial Statement is a document presented to Parliament every financial year as part of the Budget process, as required under Article 112 of the...

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  • Appropriation Bill

    Under Article 114(3) of the Constitution, no amount can be withdrawn from the Consolidated Fund without the enactment of such a law by Parliament. After the ...

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  • Banking cash transaction tax (BCTT)

      The banking cash transaction tax (BCTT) is a type of direct tax levied on withdrawal of cash more than a specified limit from bank. It was first l...

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  • Balance of payments (BoP)

    The balance of payments (BoP) records all economic transactions in goods, services, and assets of the country with the rest of the world for a specified time...

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  • Budget cycle

    The Budget cycle comprises steps beginning in the run-up to the Budget and culminates into its presentation.   The preparation of the Budget inv...

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  • Budget estimates

    Every year, the Budget is presented before Parliament by the Union finance minister. During the speech, the funds allocated for various jobs and activities a...

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  • Budget Speech

    The Budget speech, delivered by the Union Finance Minister in Parliament, has two sections — parts A and B.   Part A of the budget speech ...

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  • Capital Budget

    Capital Budget consists of capital receipts (like disinvestment, borrowing, loans from public or foreign governments, Reserve Bank of India, etc) and capital...

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  • Capital Expenditure

    Capital expenditure is the money spent by the government on the development of machinery, equipment, building, health facilities, education, etc. It also inc...

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  • Capital Receipts

    The Union Budget, which is presented by the Finance Minister of India, comprises Capital Budget and Revenue Budget. The Capital Budget is further categorised...

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  • Central Plan

    Central plan of the Union Budget is also called the annual plan. The five-year Plan is split into five annual parts and the government hopes to achieve the o...

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  • Centrally sponsored schemes

    Central welfare schemes, implemented by the government to provide financial and other aids to individuals who cannot support themselves, can be categorised i...

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  • Cess

    A cess is a form of tax levied by the government on tax with specific purposes till the time the government gets enough money for that purpose. Different fro...

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  • CPI-based Inflation

    When we talk about the rate of inflation, it often refers to the rate of inflation based on the consumer price index (CPI). The CPI tracks the change in reta...

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  • Consolidated Fund of India

      Among the several government accounts, the Consolidated Fund of India is the most crucial. Constituted under Article 266(1) of the Indian Constitu...

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  • Contingency Fund of India

    As the name suggests, the Contingency Fund of India is the emergency fund for the nation. Constituted under Article 267(1) of the Indian Constitution, the Co...

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  • Countervailing Duty

    Countervailing duty (CVD) is a specific form of duty that the government imposes in order to protect domestic producers by countering the negative impact of ...

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  • Current Account Deficit (CAD)

    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 service...

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  • Customs duty

    Customs duty refers to the tax imposed on goods when they are transported across international borders. In simple terms, it is the tax that is levied on impo...

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  • Cut Motion

    A cut motion is a special power vested in members of the Lok Sabha to oppose a demand being discussed for specific allocation by the government in the Financ...

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  • Demand for Grants

    Article 113 of the Constitution mandates that the estimates of expenditure from the Consolidated Fund of India included in the Annual Financial Statement and...

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  • Direct Tax

    As the name suggests, direct taxes are those that are levied directly on taxpayers — the income-tax, wealth tax, corporation tax, etc. In other words, ...

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  • Dividend Distribution Tax (DDT)

    Dividend Distribution Tax (DDT) is a tax levied on dividends distributed by companies out of their profits among their shareholders.   The Divid...

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  • Divestment or disinvestment

    Divestment or disinvestment means selling a stake in a company, subsidiary or other investments. Businesses and governments resort to divestment generally as...

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  • Economic Survey

    The Economic Survey brings out the economic trends in the country and facilitates a better appreciation of the mobilisation of resources and their allocation...

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  • Excess grant

    Excess grant is the money given to the government when the already allocated money for expenditure for that year does not turn out to be enough and extra mon...

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  • Excise Duty

    Excise duty is a form of tax imposed on goods for their production, licensing and sale. An indirect tax paid to the Government of India by producers of goods...

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  • Expenditure Budget

    The Expenditure Budget of the government highlights the allotment of funds for disbursement to different ministries, sectors, departments in a financial ...

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  • Expenditure profile

    Expenditure profile is a full compilation of information from all ministries and departments to analyse the Union government’s financial performance. I...

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  • Finance Bill

    When a piece of legislation is yet to be passed as a law by the Houses of Parliament, it is termed a Bill. A Finance Bill is a Bill that, as the name suggests, ...

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  • Financial Inclusion

    Financial inclusion is a method of offering banking and financial services to individuals. It aims to include everybody in society by giving them basic finan...

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  • Fiscal Deficit

    A country’s fiscal balance is measured by its government’s revenue vis-a-vis its expenditure in a given financial year. Fiscal deficit, the condi...

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  • Fiscal Policy

    Fiscal policy, in simple terms, is an estimate of taxation and government spending that impacts the economy.   Types of fiscal policy  ...

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  • Fiscal Policy Strategy Statement

    The Fiscal Policy Strategy Statement, presented to Parliament under Section 3(4) of the Fiscal Responsibility and Budget Management (FRBM) Act, 2003, outline...

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  • FRBM Act

    The Fiscal Responsibility and Budget Management Act (FRBM Act), 2003, establishes financial discipline to reduce fiscal deficit.   When was the ...

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  • Fringe Benefit Tax (FBT)

    Fringe benefit tax (FBT) was a form of tax that companies paid in lieu of benefits they offered their employees in addition to the compensation paid to them....

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  • Goods and Services Tax

    The Goods and Services Tax (GST) is a uniform indirect tax levied on goods and services across the country. GST, as an umbrella tax, replaced central taxes l...

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  • Gross Domestic Product (GDP)

    Gross Domestic Product (GDP) is the final monetary value of the goods and services produced within the country during a specified period of time, normally a ...

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  • Gross National Product (GNP)

    Gross National Product (GNP) is the total value of all finished goods and services produced by a country’s citizens in a given financial year, irrespec...

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  • Income tax

    Income tax is a direct tax that a government levies on the income of its citizens. The Income Tax Act, 1961, mandates that the central government collect thi...

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  • Indirect Tax

    An indirect tax is one that is not paid directly by a person to the government but collected by an intermediary and passed on to the government. Indirect tax...

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  • Inflation

    Inflation can be defined as a persistent rise in the general price of goods and services of common or daily use — such as clothing, food, fuel, transpo...

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  • Interim Budget

    An Interim Budget is presented by a government that is going through a transition period or is in its last year in office ahead of general elections. Traditiona...

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  • Long-term capital gains tax, or LTCG

    Capital gains mean the profit earned by an individual on the sale of his investment in assets such as stocks, real estate, bonds, commodities, etc. Basically...

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  • Macro-economic framework statement

    Every year, a macro-economic framework statement is presented before Parliament at the time of Union Budget presentation. This is under Section 3(5) of the F...

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  • Medium-term expenditure framework statement

    The medium-term expenditure framework (MTEF) statement sets a three-year rolling target for expenditure indicators, along with specifications of underpinning...

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  • Medium-term Fiscal Policy Statement

    The Medium-term Fiscal Policy Statement, presented to Parliament under Section 3(2) of the Fiscal Responsibility and Budget Management (FRBM) Act, 2003, sets...

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  • Memorandum Explaining the Provisions in the Finance Bill

    The Finance Bill is a Money Bill according to the definition in Article 110 of the Indian Constitution. The Finance Bill contains tax proposals of the govern...

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  • Minimum Alternate Tax (MAT)

    Companies can reduce their tax liability through various provisions of the Income-Tax Act, such as exemptions, deductions, depreciation, etc. There have been...

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  • Monetised Deficit

    Monetised deficit is the monetary support the Reserve Bank of India (RBI) extends to the Centre as part of the government's borrowing programme. In other...

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  • Non-debt capital receipts (NDCR)

    Taxes and duties levied by the government form the biggest source of its income or receipts. The government spends this money on both operational and develop...

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  • Non-Plan Expenditure

    The government's total spending can be divided into two broad sub-heads — plan and non-plan — with the latter constituting the bulk of expend...

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  • Non-Tax Revenue

    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 rev...

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  • Outcome Budget

    An outcome budget aims to look at the performance of various ministries handling development programmes. It also looks at the expenses incurred by them. ...

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  • Pass-through status

    A pass-through status is a business structure that takes away the obligation to pay corporation tax.   An entity usually pays tax twice — ...

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  • Plan Expenditure

    The government's expenditure can be divided into two parts — plan and non-plan. Plan expenditure is that component of government expenses which hel...

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  • Plan outlay

    Plan expenditure forms a sizeable proportion of the total expenditure of the central government. The Demands for Grants of the various ministries show the Pl...

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  • Primary Deficit

    Primary deficit refers to the difference between the current year's fiscal deficit and interest payment on previous borrowings. It indicates the borrowin...

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  • Public Account

    Article 266 of the Constitution defines the Public Account as being those funds that are received on behalf of the Government of India.    ...

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  • Public debt

    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 Consolida...

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  • Receipts budget

    A Receipts Budget is one the most important documents in a Union Budget. It is an extensive list of income generated from different sources by the government...

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  • Revenue

    Government revenue refers to all the income of the government from taxes and non-tax sources. These funds are used for government expenditure. Government rev...

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  • Revenue Budget

    The revenue budget consists of revenue receipts of the Government of India and the expenditure met using that revenue. The revenue budget details the sources...

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  • Revenue Deficit

    There can be different forms of deficit in a Budget depending on the type of receipt and expenditure taken into account. Revenue deficit is that which occurs...

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  • Revenue expenditure of the government

    Those expenditures of the government that do not lead to the creation of fixed assets are called revenue expenditures. The government spends money under vari...

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  • Revenue Receipts

    Revenue receipts can be defined as those receipts which neither create any liability nor cause any reduction in the assets of the government. They are regula...

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  • Securities Transaction Tax (STT)

    Securities transaction tax (STT) is a tax levied at the time of purchase and sale of securities listed on stock exchanges in India. STT is governed by the Se...

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  • Service Tax

    Service tax was an indirect tax levied by the government on services offered by service providers. Introduced under Section 65 of the Finance Act, 1994, serv...

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  • Short-term capital gains tax (STCG)

    Short-term capital gain tax (STCG) is a tax levied on capital gains from the sale of an asset held for a short period.   What are capital gains?...

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  • Sin Tax

    A sin tax is imposed on goods and services, which are perceived as harmful to society. Examples of products on which sin tax is imposed are: tobacco, gamblin...

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  • Subvention schemes

    The word subvention means a grant of money or aid mostly paid by the government. Subvention and subvention schemes usually find a mention in advertisements p...

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  • Surcharge

    A surcharge — or additional charge — is essentially a tax levied on a tax. It is calculated on payable tax, not on income generated. So a surchar...

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  • Tax Revenue

    Taxation is the primary source of income for the government. The most important revenue receipts for the government, taxes are involuntary fees levied on ind...

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  • Treasury Bills

    When the government goes to the financial market to raise money, it does so by issuing two types of debt instruments — treasury bills and government bo...

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  • Value-added tax (VAT)

    Value-added tax (VAT) is a type of indirect tax levied on goods and services for value added at every point of production or distribution cycle, starting fro...

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  • Wealth Tax

    Wealth tax was a charge levied on the total or market value of personal assets. Also known as capital tax or equity tax, wealth tax was imposed on the richer...

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  • Ways and Means Advances

    The Reserve Bank of India (RBI) gives temporary loan facilities to the central and state governments. This loan facility is called Ways and Means Advances (W...

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  • WPI-based Inflation

    The Wholesale Price Index (WPI) reflects changes in the average prices of goods at the wholesale level — that is, commodities sold in bulk and traded b...

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  • Zero-based Budget

    As the name suggests, zero-based Budget refers to planning and preparing the Budget from scratch or ‘zero base’. It is different from a tradition...

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