budgetory policy

8/8/2019 Budgetory Policy

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PRESENTED By:

Khushboo

Menka keshri.

MBA 2nd year

Budgetory policy


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Definition

y Budget: A plan of financial activity for a specified period of

time indicating all planned revenues and expenses for the

budget period.

y Objectives: The expected results or achievements of a budget

activity.

Total budget expenditure for 2009-10 IS Rs 10,28,032 cr


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Budget Jargons

Accountability - Accountability is the degree to which it is ensuredthat an organisation's money collected and disbursed properly, and that anauditable record is kept of all transactions.

Appropriation bill - This Bill enables withdrawal of money from

the Consolidated Fund to pay off expenses. These are instruments thatParliament clears after the demand for grants has been approved by the LokSabha

Budgetry deficit - Time when the expenses exceed the revenues isknown as Budgetry Deficit

Budget estimate - These are the estimate of Fiscal Deficit and theRevenue Deficit for the year. The term is associated with the estimates ofCenter's spending during the financial year and the income received as proceedsof tax revenues.


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Fiscal DeficitFiscal deficit occurs when the government's non-borrowed

receipts fall short of its entire expenditure, it has to borrowmoney from the public to meet the shortfall. The excess oftotal expenditure over total non-borrowed receipts is calledthe fiscal deficit.

FRBMACT

Fiscal Responsibility and Budget Management Act which wasenacted in 2003 mandates the elimination of revenue deficit by

2008-09. From 2008-09, the government is required to meetall its revenue expenditure from its revenue receipts. Only formeeting capital expenditure it is allowed to borrow.


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Finance Bill

Government's proposals for the imposition of new taxes,modification of existing tax structure or continuance of the

existing tax structure beyond the period, approved by

Parliament.

Gross Domestic Product

Cumulative market value of the goods and services manufactured

within the country in a financial year.

Indirect TaxesTaxes levied on goods manufactured, imported or exported such as

Excise Duties and Custom Duties


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Central PlanGovernment's budgetary support to Plan and, the internal and extra

budgetary resources raised by the Public Sector Undertakings.

Excise DutiesThese are duties imposed on goods manufactured within the country.


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Custom DutiesCustom duties are levied on goods when they are either brought into the country or

exported from the country

ConsolidatedFundThe government pools all its funds together in it. The fund includes all government

revenues, loans taken and recoveries of loans granted.

Contingency FundThe government has made this fund to help it tide over difficult situations. The fund

is at the disposal of the President to meet urgent expenditure, pending approval from

Parliament.

Direct TaxesTaxes imposed directly on the customers like the Income Tax and the Corporate Tax


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y Consumer Price Index (CPI)- Consumer price index is a

statistical measure of a weighted average of prices of a

specified set of goods and services purchased by wage earners

in urban areas

y Operating Budget: Annual appropriation of funds for on-

going program costs, including salaries and benefits, services

and supplies, debt service, capital outlay and capital

improvemens.


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y Expenditure

The actual spending of Governmental Funds set aside by

appropriation.

y Fiscal Year

A 12-month period of time to which a budget applies..


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y Revenues:

Amount received for taxes, fees, permits, licenses, interest,intergovernmental sources, and other sources during the fiscalyear.

y Revised BudgetRevised budget is first 9 months actual (July-March) and 3 monthsestimated (April-June).

y Sales and Use Tax

Sales and use tax is imposed on retailers for the privilege ofselling, at retail, within the City limits. This tax is based on thesales price of any taxable transaction of tangible personal property.This revenue is placed in the General Fund for unrestricted uses


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India Income tax slabs 2009-2010 for General tax payers

y Income tax slab (in Rs.)Tax0 to 1,60,000 No tax1,60,001 to 3,00,000 10%3,00,001 to 5,00,000 20%Above 5,00,000 30%

India Income tax slabs 2009-2010 for Womeny Income tax slab (in Rs.)Tax

0 to 1,90,000 No tax1,90,001 to 3,00,000 10%3,00,001 to 5,00,000 20%Above 5,00,000 30%India Income tax slabs 2009-2010 for Senior citizen

y Income tax slab (in Rs.)Tax

0 to 2,40,000 No tax2,40,001 to 3,00,000 10%3,00,001 to 5,00,000 20%Above 5,00,000 30%


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India Income tax slabs 2010-2011 for General tax payers

y Income tax slab (in Rs.)Tax0 to 1,60,000 No tax1,60,001 to 5,00,000 10%5,00,001 to 8,00,000 20%Above 8,00,000 30%

yIndia Income tax slabs 2010-2011 for WomenIncome tax slab (in Rs.)Tax0 to 1,90,000 No tax1,90,001 to 5,00,000 10%5,00,001 to 8,00,000 20%Above 8,00,000 30%India Income tax slabs 2010-2011 for Senior citizen

yIncome tax slab (in Rs.)Tax0 to 2,40,000 No tax

2,40,001 to 5,00,000 10%5,00,001 to 8,00,000 20%Above 8,00,000 30%


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Previous budget review

y Excise duty on fibre for cheaper cloth reduced.

y Excise duty on petrol-driven small trucks reduced to 10%.

y Exemption of duty on goods made at construction sites

restored.y Drugs for heart diseases to become cheaper.

y Customs duty on gold and silver import increased.

y Mobile phone accessories to become cheaper.


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Cont..y Small businesses exempt from advance tax.

y Custom duty on LCD panels halved.

y Customs duty on bio-diesel reduced.

y

Higher public investment in infrastructure.y One lakh dwelling units for paramilitary forces to be built .

y New pension benefits for 12 lakh jawans.

y Fringe Benefit Tax to be scrapped.

y

Eliminate the surcharge on personal Income tax by 10%.y Aiming for direct transfer of subsidy to farmers.

y Banking network to be expanded.


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Continuey Hike in IT exemption for women to Rs 1,90,000

y Hike in IT exemption to Rs 2,40,000 for senior citizens

y General Sales Tax model will have a Central GST and State GST

y

GST to come into effect from April 01, 2010y Interest subsidy on students' loans in higher education

y Government to spend Rs.12K cr on rural roads in FY'10

y Commonwealth allocation hiked to Rs 16,300 cr

y Govt to hike allocation to National Ganga Project to Rs 562 cry Rs 7000 cr for rural electrification

y Rice, wheat at Rs 3 per kg to the poor


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Cont..

y National action plan on climate change.

y Full interest subsidy for students in approved institutions .

y Rs 100 cr one-time grant to expand banks in unbanking areas.

y Allocation for PM Gram SadakYojna up by 59 per cent.

y Interest subsidy on education loans.

y National Mission for female literacy.

y Interest subsidy for home loans up to Rs 1 lakh.

y Government to introduce food security bill.

y Move towards energy security via Integrated Energy Act.

y Indira AwaasYojna hiked by 63% to Rs 8,883 cr


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y VAT introduction to boost states' tax revenues.

y Trade gap narrowed to $76.24 bn in April-December.

y Favours monthly ration coupons usable anywhere for poor

y FRBM Act needs to specify the nature of shocks that wouldrequire relaxation of the targets.

y Commission proposes new Fiscal Responsibility and

Budgetary Management (FRBM)Act.

y Commission recommends increase in states' share to 32 percent of Central tax proceeds from the current level of 30.5

per cent.


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y India's GDP expected to return to 9% growth in 2011-2012

y India can become world's fastest growing economy in 4 yrs

y Hike in fuel prices will impact inflation


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THEEND..DNEEHT

THANK YOU ALL

budgetory policy

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