Here are the answers:1. Fiscal Deficit = Total Expenditure - Total Receipts (excluding borrowings)2. Revenue Deficit = Revenue Expenditure - Revenue Receipts 3. Zero primary deficit means that government has to resort to borrowing only to make interest payments.4. One implication of revenue deficit is that it reduces the assets of the government
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in this PPT government budget and its classification of budget is explained. menaing of budget, different type of budget deficits are also explained in it. you can also find on what basis revenue and capital receipt and expenditure are classified. different type of budget deficits and their implications are also explained.
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Ähnlich wie Here are the answers:1. Fiscal Deficit = Total Expenditure - Total Receipts (excluding borrowings)2. Revenue Deficit = Revenue Expenditure - Revenue Receipts 3. Zero primary deficit means that government has to resort to borrowing only to make interest payments.4. One implication of revenue deficit is that it reduces the assets of the government
Ähnlich wie Here are the answers:1. Fiscal Deficit = Total Expenditure - Total Receipts (excluding borrowings)2. Revenue Deficit = Revenue Expenditure - Revenue Receipts 3. Zero primary deficit means that government has to resort to borrowing only to make interest payments.4. One implication of revenue deficit is that it reduces the assets of the government (20)
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Here are the answers:1. Fiscal Deficit = Total Expenditure - Total Receipts (excluding borrowings)2. Revenue Deficit = Revenue Expenditure - Revenue Receipts 3. Zero primary deficit means that government has to resort to borrowing only to make interest payments.4. One implication of revenue deficit is that it reduces the assets of the government
- 1. Government Budget PREPARED BY HEMANT KUMAR JAIN PGT ECONOMICS KV AMBIKAPUR
- 3. Topics • Meaning of Budget • Objectives of Budget • Classification of Budget • Types of Budget deficit and there implication
- 4. Meaning of Budget • “A government budget is an annual financial statement showing estimates of expected revenue and anticipated expenditure during a fiscal year.” • It does not show actual values. • It also explains about government’s last budget performance.
- 5. Objectives of Budget • Economic stability • GDP growth • Redistribution of income and wealth • Allocation of resources • Directly production of goods and services. • Management of PSU’s
- 6. Economic stability • It implies control on price fluctuations. • Govt. do this by tax and expenditure policies. • During inflationary conditions govt. impose high taxes and reduce expenses. • During recessionary condition taxes are reduced and expenses are increased.
- 7. GDP growth • It refers to sustainable increase in production of goods and services. • Govt. try to motivate production activities by giving incentives to producers through tax holidays , subsidies, technical support etc. • Govt. prepare infrastructure that directly and indirectly supports the growth process. • GDP growth reduces the poverty and unemployment in economy.
- 8. Redistribution of income and wealth • Govt. try to reduce the income disparities by using budgetary tools. • Govt. impose tax on rich and give subsidies to poor. • Govt. directly fulfill the basic needs of poor like education, health, food etc. • By this disposal income of rich reduces and living standard of poor improves.
- 9. Allocation of Resources • Govt. try to influence the allocation of resources by using budgetary tools. • Govt. promotes the production of essential goods and demotivate the production of hazardous goods. • Govt. give incentive to the producers for investing in backward areas. • Govt. try to balance the regional disparities.
- 10. Directly Production of goods and services • Govt. directly produce the goods and services which are not produced by private sector. • Sectors which are less profitable, govt. produce for that sector. • Sector which require huge investment, govt. invest in those sectors. • Goods and services which are essential for people, govt. produces those goods and services
- 11. Management of PSUs • Govt. manage the PSUs through the budget policies. • Expansion, investment , cost, profit related decision are taken by govt. through budget policies. • Profit of PSUs is used by govt. to support its expanses.
- 13. Budget Receipt:-It refers to all estimated money receipt of the govt. during a financial year. Revenue Receipt 1. Do not create libility for govt. 2. Do not reduce assets of govt. Capital Receipt 1. Create libility on govt. 2. Reduce assets of govt.
- 14. Revenue Receipt Revenue Receipts Tax Receipts Income Tax GST Corpora tion Tax Excise duty Other taxes Non-tax Receipts Income from PSE Grants & donations Special assessmentEscheat
- 15. Capital Receipt Capital Receipts Recovery of Loans Borrowings Disinvestment
- 16. Budget Expenditure:-It refers to all estimated expenditure of govt. during a financial year. Revenue Expenditure 1. Do not reduce libility of govt. 2. Do not increase assets for govt. Capital Expenditure 1. Reduce libility of govt. 2. Increase assets for govt.
- 17. Revenue and Capital expenditure Budget expenditure Revenue expenditure Wages and salaries Subsidies Defence expenses Capital expenditure Purchase of shares Expenditure on assets Purchase of machinery Loans to the other
- 18. Find out followings are revenue receipt Or capital receipt or revenue exp. Or capital exp. 1. Borrowings 2. GST collection 3. Recovery of loans 4. Profit of PSU 5. Disinvestment 6. Grants received from world bank --Capital receipt --Revenue receipt
- 19. Find out followings are revenue exp. Or capital exp. 1. Construction of school building –capital expenditure 2. Interest payment –revenue expenditure 3. Loans given to state govt. 4. Purchase of machinery 5. Nationalization of company. 6. Subsidies 7. Expenditure on tax collection
- 20. Budget Deficit • It refers to excess of budget expenditure over budget receipts. Budget Deficit= Budget Expenditure-Budget receipt
- 21. Types of Budget Deficit Budget Deficit Revenue Deficit Fiscal Deficit Primary Deficit
- 22. Revenue Deficit • It refers to excess of revenue expenditure over revenue receipts. RD = RE - RR Implications:- • It Reduces the assets for govt. • It may create inflationary conditions. • It creates more revenue deficit.
- 23. Fiscal Deficit • The total borrowings of government during a financial year. OR • Excess of budget expenditure over budget receipt excluding borrowings. FD = BE(RE+CE) – BR (RR+CR excluding borrowings) or • Fiscal Deficit = Total borrowings = Borrowings from RBI + borrowings from public + borrowings from external sources. or • Fiscal Deficit = RD +(CE- CR excluding Borrowings)
- 24. • It creates the condition of debt trap.( a situation in which govt. borrow to pay its past borrowings) • Crowding out(reduction of funds for private sector due to borrowing by govt. from market) • Burden on future generations. • Burden on economy. • Vicious cycle of high fiscal deficit and low GDP. Implications of Fiscal Deficit:-
- 25. Primary Deficit • It refers to the difference between Fiscal Deficit and payment of interest. • fiscal deficit indicates borrowing requirement inclusive of interest payment, primary deficit indicates borrowing requirement exclusive of interest payment (i.e., amount of loan). • PD = FD – Payment of interest • zero primary deficits means that government has to resort to borrowing only to make interest payments.
- 26. Questions 1. What is the formula of fiscal deficit? 2. What is the formula of revenue deficit? 3. What is indicated by zero primary deficit? 4. Give any one implication of revenue deficit.