Following are some of the commonly used terms in connection with the Indian Budget.
Ad- Valorem Duties :- Defined as those duties that are established as a certain percentage of the price of the product.
Appropriation Bill :- It is a bill that authorizes payment and appropriation of expenses from the Consolidated Fund. This bill is introduced only after the general discussion on budget proposals and the completion of voting on grants. The procedure to pass the bill in parliament is like other money bills.
Bill :- It is a well drafted legislative proposal that later becomes an Act on being approved by both the Lok Sabha and Rajya Sabha.
Budget/ Annual Financial Statement :- According to the section – 112 of the Indian Constitution, the government presents a statement of estimated receipts, expenditure and a detailed plan that is presented for every financial that is for 1st of April to 31st March of each year.
There are usually three divisions of budget and for each of them a statement of expenditure & receipts are presented. These three divisions include – Contingency Fund, Consolidated Fund and Public Account.
Budget Estimates :– These are assessment of expenditure by the government for a year. This also includes the estimate of Revenue Deficit and Fiscal Deficit for the year.
Budget Deficit :- When the expenditure becomes more than revenues, then the budgetary exercise is considered a failure as there is shortage of funds. Such a situation is said to be a 'Budget Deficit'.
Capital Budget :- This budget comprises of loans & advances that are granted to Union & State territory by the Union government, corporations, government companies and other parties. Capital budget also includes capital receipts and payments by the government.
Capital Expenditure :- The total expenditure by the government on acquiring any asset that may include investment in shares, machinery, building or land. The scope of capital expenditure extends to payments, advancements or loans that are approved or sanctioned to the State governments, union territories, public sector undertakings by the Central government.
Countervailing Duties :- These duties are imposed on all imports inorder to thwart any kind of unfair trading practices carried by the foreign countries.
Consolidated Fund :- This fund is made of the revenues that is received by Government plus the loans that is raised by this revenue as well as the receipts from recoveries of loans granted by it.
Contingency Fund :- The fund that is used by the government in order to meet the unforeseen expenditure or incase to meet emergencies. The contingency fund is generally used when the government cannot wait for long for the parliament to authorise the expenses on the expenditure.
CENVAT :- This scheme is implied for most of the goods and reduce the cascading effect of indirect taxes on finished products.
