Budget and Fiscal Deficitttttt

8/3/2019 Budget and Fiscal Deficitttttt

1/18

Budget and Fiscal Deficit

Business Economics


2/18

What is Budget..???

y A budget is a plan for

how you are going to spend

your money

y It is a Statement of

estimated receipts and

expenditures of the Central

Government of everyfinancial year


3/18

Measures takeny Introduction of DTC and GST by April 2011

y Capitalising PSU banks

y Stimulus to continue for small exporters

y I

nfrastructure development gets a fillip:y Focus on power strengthened

y Rural & urban development get their due share

y Fiscal deficit roadmap unveiled

y

Relief for individual tax payersy MAT hiked, surcharge reduced for companies:

y Partial rollback of fiscal stimulus


4/18

Structure and reform of Budgetary

Practices

Budget

RevenueBudget

RevenueReceipts

RevenueExpenditure

CapitalBudget

CapitalReceipts

CapitalExpenditure


5/18

Revenue Budget

Revenue receipts

Revenue receiptsRevenue

expenditure

Revenueexpenditure


6/18

Capital Budget

Capital receipts

Capital receipts Capital expenditure

Capital expenditure


7/18

Estimated Budget 2010-2011:

Receipts

Total Receipts

11,08,749

Revenue Receipts6,82,212 (61.5%)

Capital Receipts

4,26,537 (38.5%)

RevenueReceipts6,82,212

Non-Tax revenues

1,48,118 (21.7%)

Tax revenue

5,34,094 (78.3%)

CapitalReceipts

4,26,537

Recoveries ofLoans

5,129 (1.2%)

Borrowings &other Liabilities

3,81,408 (89.4%)

Other Receipts

40,000 (9.4%)

(In Crore of Rupees)


8/18

Continued.

y The Government in 2010-11 will collect Rs. 7,46,651 cr

through all kinds of Taxes, out of this money Rs. 3,560 cr will

be transferred to National Calamity Contingency Fund and

Rs. 2,08,997 cr will be share of the state governments.

y Government will get Rs. 1,48,118 cr from non-tax revenue,

such as interest receipts, Dividends and profits, External

grants, and other nontax revenues, plus receipts of Union

Territories

y So far Government has added Rs. 82,000 Cr to its receipts by

sell of 3G spectrum and IPO of Coal India Ltd


9/18


Expenditure

Expenditure

11,08,749

Plan Expenditure

3,73,092(33.64%)

Non-PlanExpenditure

7,35,657(66.36%)

Non-planExpenditure

7,35,657

Capital Non-PlanExpenditure

92,058 (12.51%)

Revenue Non-Plan Expenditure

6,43,599(87.49%)

PlanExpenditure

3,73,092

Capital PlanExpenditure

57,967 (15.53%)

RevenuePlan Expenditure

3,15,125(84.47%)


10/18

Continued.

y Total expenditure of Rs. 11,08,749 cr is 8.53% more than

the last years revised estimates of Rs. 10,21,547.

y The plan expenditure of this year involves roughly 15%

increase while the non-plan expenditure involves 6% increasefrom the revised estimates of 2009-10

y Budget has supported Rs. 2,80,600 to Central Plan Outlay of

Rs. 5,24,484


11/18

Fiscal Deficit

y Internationally used concept.

y It measures entire shortfall in the non-debt for financing the

government expenditure.

yIt reflects the impact of fiscal operations on the indebtednessof the Government by quantifying the total borrowing by the

Government.

Fiscal Deficit =Total expenditure (Revenue receipts +

Reco

verieso

f Lo

ans + Other receipts)


12/18

Estimated Budget

2010-2011:

Fiscal Deficit = 1,108,749

(6,82,212 + 5,129 + 40,000) =

3,81,408

The fiscal deficit for this year is 5.5%

of the estimated GDP of

Rs.69,34,700 Cr.

1. Revenue Receipts 682212

2. Tax Revenue (net to Centre) 534094

3. Non-tax Revenue 148118

4. Capital Receipts (5+6+7) 426537

5. Recoveries of Loans 5129

6. Other Receipts 40000

7. Borrowings and other

Liabilities

381408

8. Total Receipts (1+4) 1108749

9. Non-plan Expenditure 735657

10. On Revenue Account of 643599

11. Interest Payments 248664

12. On Capital Account 92508

13. Plan Expenditure 373092

14. On Revenue Account 315125

15. On Capital Account 5796716. Total Expenditure (9+13) 1108749

17. Revenue Expenditure 958724

18. Capital Expenditure 150025

19. Revenue Deficit (17-1) 276512

20. Fiscal Deficit 38140821. Primary Deficit (20-11) 132744



13/18

How Fiscal Deficit will be reduced?y There are two ways to reduce

the Fiscal Deficit

y Reducing spending

y Raising non-borrowed

receipts

y Non Borrowed receipts

includes:

Tax and Dividend receipts, Loan

recovered, revenues from

auctioning off telecom spectrum

and disinvestment proceeds


14/18

The Fiscal Responsibility and Budget

Management Bill

y The Committee on Fiscal Responsibility Legislation was

constituted on 17th January, 2000 to go into various aspects

of the fiscal system and recommend a draft legislation on

fiscal responsibility.

y Medium-term fiscal policy statement.

y Fiscal policy strategy statement.

y Macro-economic framework statement.


15/18

Makarand Rane

Abhishek Jagwani

Prem LilaniKailash Motwani

Presented by:-


16/18


Receipts

Taxrevenue

5,34,094

Non-Taxrevenues

1,48,118

Revenuereceipts6,82,212

Loans

5,129

Liabiliti

es3,81,408

Other

40,000

Capital

receipts4,26,537



17/18


Expenditure

Non-PlanExpenditure

7,35,657

PlanExpenditure

3,73,092

Expenditure

11,08,749



18/18

Continued.

RevenueNon-Plan

Expenditure

6,43,599

CapitalNon-Plan

Expenditure

92,058

Non-planExpenditure

7,35,657


3,15,125


3,15,125


57,967


57,967

PlanExpenditure

3,73,092

PlanExpenditure

3,73,092


Documents

Budget and Fiscal Deficitttttt