Govt. budget! It always descends like a thunderbolt. Budget means, working out a strategy as to how to meet the intended expenditure till next year by levying fresh taxes to enhance revenue. It has five branches as discussed below.
It is an event that the entire nation expect for income tax relaxation or some sort of waiver. And the old practice is that, it is the Finance Minister who would always read the Budget only in the evening at 5:30 p.m. And the date they select is the 28th of every February. So the tradition goes in India. Upon calculating the revenue and the expenditure which is of two kinds: plans and non-plans, the shortfall between the earnings and expenditures is known as deficit.
Ministers of all portfolios need to submit the expenditures and revenues of their respective branch. But still it is only a document until it is read and got the nod of approval from the MPs.
Deficit: Shortage of funds with the govt. The expenses are more and the revenue is less. It forces the govt. to squeeze more money from the public by means of taxes.
It is better called as budgetary deficit.
Estimation: To anticipate the unexpected! It means, the estimation of Fiscal Deficit with proportion to Revenue deficit for the whole year, starting from April 1 to March 31, being the financial year everywhere. It evaluates the loss and gain of that financial year.
Fiscal Deficit: It calculates loss and gain on the proposed expenditures until the next year. What would be the amount earned vide taxes, while the proposed amount incurring expenditure, if overlapping the former.
Consolidated Fund: One can say that it is the govt.’s Treasure Trove, like the revenue the govt. had earned by all the sources.
Direct Taxes. Taxes levied on the public utility that would fetch the govt. extra revenue. It results in price hike. The common knowledge about it is that, only in India it causes such an emotion!
Said Albert Einstein, “The hardest thing in the world to understand is income tax!”