Interim Budget 2024: Key Budget Terms And Terminology You Should Know

New Delhi: Union Finance Minister Nirmala Sitharaman will present the Interim Budget on February 1, 2024. As the date approaches, there is curiosity among commoners about it. The annual financial statement includes several terms that are not so common in the public domain or it is difficult for laymen to understand.

Here we are decoding such budget-related terminology in easy and simple language with their meanings.

Annual Financial Statement

As per Article 112 of the Indian Constitution, Budget is known as the Annual Financial Statement or AF, in short. It is the statement of the government's expected revenue and expenditure in a particular financial year. 

Consolidated Fund

The government collects money through taxes, loans, and other sources, and all of it goes into a big pot called the Consolidated Fund of India. The government spends money from this pot for various things, except for specific cases where it uses other funds. Before taking money out of this pot, the government needs permission from the Parliament.

Direct Taxes

As you may be aware with the term Direct taxes. This is the tax directly paid by the taxpayers in the form of income tax and corporate tax. 

Indirect Taxes

Indirect taxes are GST, VAT, customs, and service tax. They are not directly collected from people but indirectly added to the prices of goods and services.

Fiscal Policy

Fiscal policy is like the government's plan to keep an eye on how the country is doing economically. It's basically an estimate of how much money the government will get from taxes and how much it plans to spend.

Finance Bill

A Finance Bill is a proposal by the government to suggest new taxes or changes to existing taxes.

Fiscal Deficit

A fiscal deficit is when the government spends more money than it earns, not counting the money it borrows. It's like a gap between what the government spends and what it gets.

Economic Survey

The Economic Survey is a big document that talks about how well or not how well the economy is doing in the current year. They usually present it just before the government announces its budget in Parliament.

Budget Estimate

A budget Estimate is like a plan for the next year, showing how much money the government thinks it will spend and earn. It represents the value assigned to the government's goals.

Capital Expenditure

The government uses some money for building, buying, or taking care of things like machines. All that spending is called capital expenditure. It is also known as Capex in short.

Disinvestment

Selling existing stuff is called disinvestment or divestment. Usually, it's done to make money or cut losses from things that aren't doing well.

Revenue Deficit

When the government spends more money than it gets from regular sources, it's called a revenue deficit. It means the government is overspending compared to what it's making regularly.

Monetary Policy

Monetary policy is like a tool the central bank uses to control how much money flows into the economy and the banking system.

Inflation

Inflation is when the prices of things go up. It's like saying the buying power for a set of things becomes weaker because you need more money to get them.