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Indian Union Budget - Make sense of all the big words


   THE finance minister's budget speech may be ridden with jargon but its core is no different from that of a household budget. The glossary is arranged in a particular order to ensure that no unexplained word jumps out suddenly.

Annual financial statement    

This is the last word on the government's receipts and expenditure for the financial year, presented to Parliament. This is actually the annual budget, as stated in the Constitution. Divided into three parts — Consolidated Fund, Contingency Fund and Public Account — it has a statement of receipts and expenditure of each. Expenditure from the Consolidated Fund and Contingency Fund requires the nod of Parliament.

Consolidated Fund


   The government's life line. It contains all revenues, money borrowed and receipts from loans it has given. All government expenditure is made from this fund.

Contingency Fund    

As the name suggests, any urgent or unforeseen expenditure is met from this Rs 500-crore fund, which is at the disposal of the President. The amount withdrawn is returned from the Consolidated Fund.

Public Account    

When it comes to this account, the government is nothing more than a banker, as this is a collection of money belonging to others such as public provident fund.

Revenue vs capital    

The budget has to distinguish all receipts/expenditure on revenue account from other expenditure. So all receipts in, say, the Consolidated Fund, are split into Revenue Budget (revenue account) and Capital Budget (capital account), which include non-revenue receipts and expenditure.

Revenue receipt/expenditure    

All receipts like taxes and expenditure like salaries, subsidies and interest payments that do not entail sale or creation of assets fall under the revenue account.

Capital receipt/expenditure    

Capital account shows all receipts from liquidating (e.g. selling shares in a public sector company) of assets and spending to create assets (lending to receive interest).

Revenue/capital budget    

The government has to prepare a Revenue Budget (detailing revenue receipts and revenue expenditure) and a Capital Budget (capital receipts and capital expenditure).

 


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