Professional Documents
Culture Documents
Components of the
national budget and
how these impact on
the business world.
Budget
II. To reduce inequalities in income and wealth:Through budget government tries to reduce the gap
between Rich and poor. This is achieved through taxing the
rich and subsidizing the needs of poor people.
III. To achieve economic stability :-During depression
government reduces rate of tax and borrowing and increases
public expenditure. During inflation government increases
the rate of tax and borrowing and decreases public
expenditure.
IV. Management of Public Enterprises :Governmentt has many public sector companies to manage
and run
Planning Commission's
role
Step -11:-The ministries
would provide budget
estimates for plan expenditure for budget estimates for
the next financial year, only after they have discussed
their respective plan schemes with the Central
Planning Commission.
Components of Government
Budget:1. Revenue Budget Amount of money allocated to
Components of Government
Budget:-
Components of Government
Budget:-
ii Non-Tax Revenue:
Components of Government
Budget:-
Components of Government
2.Budget:Capital Budget
(a) Capital Receipts :-Receipts which create a liability or result in a
reduction in assets are called capital receipts. They are obtained by the
government by raising funds through borrowings, recovery of loans and
disposing of assets .
For Example-Loans raised by the government from the public through the
sale of bonds and securities.
Borrowings by government from RBI and other financial institutions through
the sale of Treasury bills.
Loans and aids received from foreign countries and other international
Organizations like International Monetary Fund (IMF), World Bank, etc.
Receipts from small saving schemes like Provident fund, etc.
Recoveries of loans granted to state and union territory governments and
other parties.
Components of Government
Budget:-
Components of Government
Plan and non-plan
Budget:-expenditure
Capital Expenditures
Revenue Expenditures
Capital Receipts
Revenue Receipts
Budget Deficit
Budget deficit is commonly known as the national debt.
Budget deficit means that a country has more money going out
when compared to the money its earning.
Budget deficits can usually be resolved by raising taxes, cutting
spending or a combination of both.
Unlike fiscal deficit, while calculating budget deficit, the countrys
borrowings are taken into consideration.
Indias budget deficit last fiscal year was 4.9 percent of gross
domestic product.
TYPES OF DEFICIT
FISCAL DEFICIT
Impact of budget on
The Budget impacts the followingBusiness
Stock markets.
How the budget spends and invests money
affects the fiscal deficit.
Economic growth
GDP
Tax collection
State of economy