The Fiscal Budget 2012-13

7/28/2019 The Fiscal Budget 2012-13

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The Fiscal BudgetBy

Hitesh I. BhatiaAssistant Professor (Economics)

Navrachana University

Vadodara, GujaratMbl - 09825484126

[email protected]
mailto:[email protected]:[email protected]


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The word budget has been derived from theFrench word bougette which means a small

leather bag.

It symbolizes a bag containing the financial

proposals. This term of budget used for the annual

financial plans of government dates back to

1773.


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Definition

A budget is a master financial plan of

government.

It presents the estimates of

forthcoming revenue and

proposed expenditure of the period

simultaneously

Philip Taylor


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Every budget statement has got at least three

sets of figures:-

Actual figures for preceding year

Budget and revised figures of the current

year

Budget estimates for the following year.

Budget at a Glance

2010-2011 2011-2012 2011-2012 2012-2013Actuals Budget

Estimates RevisedEstimates BudgetEstimates


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Government Expenditure

Plan Expenditure Non-plan Expenditure

Capital

ExpenditureRevenue

Expenditure


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Plan Expenditure-

means estimated

expenditure provided

in the budget on

various programmes

less than five year

plan.

Non-Plan Expenditure-

means estimated

expenditure provided

in budget on routine

functioning of the

government. For e.g.,

subsidies, salaries,defence, etc.

Revenue Expenditure-

means the expenditure

which does not create

assets or reduce

liabilities.Its recurring

in nature.

Capital Expenditure-

means the expenditure

which creates assets

or reduces liabilities.

Its non recurring in

nature.


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2010-2011 2011-2012 2011-2012 2012-

2013Actuals

Budget

EstimatesRevised

EstimatesBudget

Estimates


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Plan & Non-Plan Expenditure

Developmental

Expenditure

Non-Developmental

Expenditure

1.Social Expenditure

Medical and Public Health

Education, Housing and

Sanitation

Social and Family Welfare

Programmes

2. Economic Expenditure

Agriculture Industry

Transportation and

Communication

Energy and Minerals

Defense

Public Administration

Police and Judiciary

Tax collection

Interest on Public Debt

Subsidies


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Government Receipts

Revenue Receipts Capital Receipts

Tax Revenue

&

Non-tax Revenue

Recovery of loans

Borrowings

Other Receipts

Interest and Receipts

Dividend and Profit

Other Monetary Receipts

Grants and Aids


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Tax Revenue


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Sources of Governments Revenue

Taxes levied by

Central Government

Personal Income

Tax

Corporation Tax

Custom Duty

Central Excise

Service Tax

Taxes levied by StateGovernments

Taxes on Income Agricultural Income Tax

Profession Tax

% share in Income Tax.

Taxes on Property Land Revenue

Estate Duty

Stamps and Registration

Fees Taxes on Commodities

Sales Tax

Excise Duties

Entertainment Tax


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Direct TaxesTaxes, whose incidence

cannot be shifted from tax

payers to other persons,

are known as Direct taxes

such as Income tax and

Wealth tax.

Sources of Direct Taxes

(i) Income tax (ii)

Corporation tax (iii)

Profession tax (iv)

Agricultural income tax (v)Wealth tax (vi) Estate Duty

(vii) Land revenue (viii)

Registration and license

fee.

Indirect Taxes

Taxes, whose incidence isshifted from tax payer to

other persons is knownas Indirect tax.

Sources of Indirect Tax

(i) Sales tax

(ii) Excise

(iii) Customs


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Budget

Balanced Budget Unbalanced budget

Surplus Budget Deficit budget

1. Revenue deficit

2. Fiscal Deficit3. Primary Deficit

4. Budgetary Defici

2012


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2010-2011 2011-2012 2011-2012 2012-

2013Actuals

Budget

EstimatesRevised

EstimatesBudget

Estimates


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Balanced Budget-total

government expenditure

and governments revenue

is equal.

Unbalanced Budget- Total

of Governments expenditure

and revenues are not equal.

Surplus Budget- Total

government receipts are

more then its expenditure.

Deficit Budget- Total

government receipts are less

then its expenditure.

Primary Deficit- it means

Fiscal deficit minus Interestpayments.

Budgetary Deficit- a state

in which total governmentexpenditure is more than

total receipts


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Fiscal Budget

When totalgovernmentsexpenditure is morethen its total receipts

(both capital andrevenue) excludingborrowings.

This shows the extent

to which governmentwill have to dependupon borrowings tomeet its expenditure.


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1. GDP is estimated to grow by 6.9% in 2011-12, after having grown at 8.4% in preceding

two years.2. Key reasons for the interruption of Indian

economy: euro zone crisis, economy,

political turmoil in Middle East and rise incrude oil price.

3. Growth moderated due to tight monetary

policy.

4. Economy is turning around as core

sectors and manufacturing show signs of

recovery.


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1. Current account deficit at 3.6% of GDPfor 2011-12.

2. Fiscal deficit for 2012-13 pegged at Rs

5,13,590 crore, which is 5.1 per cent of

GDP against 5.9% in FY 2011-12

3. Efforts to keep central subsidies under2% of GDP in 2012-13. Over next 3 year,

to be further brought down to 1.75%.

4. For 2012-13, Rs 30,000 crore to be raisedthrough disinvestment.


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Thank You

Hitesh I. Bhatia

Assistant Professor (Economics)

Navrachana University

Vadodara, GujaratMbl - 09825484126

[email protected]
mailto:[email protected]:[email protected]

The Fiscal Budget 2012-13

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