BUDGET TERMINOLOGY

BUDGET TERMINOLOGY

1. Budget

A budget is a financial plan prepared for a specific period, usually one year. It estimates the expected receipts (revenue) and expenditure of a government, organization, or individual. In the context of public finance, the budget helps governments allocate resources, plan development expenditure, and maintain fiscal discipline. It also reflects economic priorities such as welfare spending, infrastructure investment, and taxation policies.

2. Union Budget

The Union Budget of India is defined under Article 112 of the Constitution. It is formally called the Annual Financial Statement and contains the estimated receipts and expenditure of the Government of India for a financial year. The Finance Minister presents it before Parliament every year. The Union Budget is divided mainly into two parts:

• Revenue Budget
• Capital Budget
  It provides the government’s fiscal policy direction and outlines allocations for various sectors.

3. Capital Budget

The Capital Budget includes capital receipts and capital expenditure. Capital receipts mainly consist of borrowings, loans, disinvestment proceeds, and recovery of loans. Capital expenditure refers to spending on asset creation, infrastructure development, loans to states or public sector enterprises, and investments. It reflects long-term economic development and increases productive capacity.

4. Revenue Budget

The Revenue Budget contains the government’s revenue receipts and revenue expenditure.
Revenue receipts are divided into:

• Tax Revenue – such as income tax, corporate tax, customs duty, and excise duty.
• Non-tax Revenue – such as interest income, dividends from public sector enterprises, and fees or charges for government services.

Revenue expenditure includes spending that does not create assets, such as salaries, subsidies, and interest payment