Decoding the Budget Terminology in 15 minutes

This is a video decoding the Budget Terminologies. The latest budget review has also been uploaded, and can be found here    • Decoding the Budget Terminology in 15 minutes  

How can we Understand the Union Budget in 15 minutes?

Here is a video that will help you do so.

Let’s understand some key terms in the Union Budget

We look at the government receipts and expenditure, and try to decode these terms

➡️ Receipts

The receipts are divided into 2

📌 Revenue Receipts: These are recurring – either through Tax or Non-Tax.

📌 Capital Receipts: Usually one-time receipts, mainly comprising of Disinvestment proceeds and Borrowings.

The overall gross tax revenue is comprised of

📌 Direct taxes: Taxes on income – that we pay directly. Income tax and Corporate tax are predominant parts here.

📌 Indirect Taxes : Taxes on transactions – that we pay to an intermediary, who deposits on our behalf. Eg GST, Excise Duty on Fuels

Non-Tax revenues comprise of Dividends by various PSU entities.

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➡️ Expenditures

Here too there are 2 classifications

📌 Capital Expenditure: Any expense that creates an asset or reduces a liability for the government is capital expenditure – example – Infra spending, increasing stake in some PSU

📌 Revenue Expenditure: All other expenses are revenue expenditure (Think Interest Payments, Subsidies, etc)

Capital expenditure is only about 20% of overall spending, but is growing at a CAGR of 30% over the past two years.

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