New Delhi | Jagran Business Desk: Union Finance Minister Nirmala Sitharaman will present the second of the NDA II on February 1 amid economic challenges posed by the coronavirus pandemic. Sitharaman, who will present her second budget this year, has called the upcoming budget a "never before" event and it is expected that the government will focus on reviving the economic growth in it.

Before the central government announces the Union Budget 2021, here are some glossaries of terms used budget:

What is a union budget?

Budget, which is derived from a French word, is a financial plan that includes an estimate of the government's revenue and expenditure from a fiscal year that begins from April 1 and ends on March 31. It also includes the sum of money which the government allocates to particular sectors across the country. The Union Budget is prepared by the Finance Ministry and presented by Finance Minister on the second day of Budget Session of the Parliament.

Annual Financial Statement:

The Annual Financial statement is a 10-page document that is divided into three parts -- consolidated fund, contingency fund and public fund. In Annual Financial statement, which is the main part of the budget, the government presents its plan of estimated receipts and expenditure.

Aggregate supply:

Aggregate supply is the total value of the goods and services that are produced in the country.

Aggregate demand:

Aggregate demand or domestic final demand is the total demand for final goods and services in a country at a particular point of time. Sometimes, it is also known as 'effective demand'.

Balance of payments:

Balance of payments (BoP) is the difference between the demand and supply of a country's currency on the foreign exchange market at a particular point of time. It consists of two components -- the current account and the capital account.

Budget estimates:

Budget estimates contain the estimate of fiscal deficit and revenue deficit during a fiscal year.

Consolidated Fund:

Consolidated fund includes revenue receipts and treasury bills issued by the central government.

Contingency fund:

Contingency fund is the amount of fund saved by the central government for any kind of emergency. Notably, any expenditure from the contingency fund requires approval from the Parliament.

Corporate tax:

It is the tax paid by firms on the profits they earn.

Customs duties:

Customs duty is an indirect tax which is imposed by the central government on goods that are imported or exported from the country.

Disinvestment:

Disinvestment is the action of the central government selling or liquidating an asset or subsidiary.

Export duty:

It is the tax which is imposed on exports.

Import duty:

Like export duty, Import duty is the tax imposed on the import of goods.

Direct taxes:

Direct taxes are the taxes which are paid by individuals or firms or organisations on their income and resources.

Cess:

Cess is a tax which is imposed on for promoting services like health, education, etc.

Surcharge:

Surcharge, also known as a checkout fee, is the additional fee or tax which is calculated based on tax liability.

Gross Domestic Product (GDP):

It is the total market value of all final goods and services that are produced in a country during a financial year.

Gross National Product (GNP):

It is the total market value of all final goods and services that are produced within the country during a financial year.

Plan expenditure:

An expenditure which is the complete list of expenditure that has been detailed under the current of the centre or centre's advances to state for their plans is known as Plan Expenditure.

Non-plan expenditure:

It includes both development and non-development expenditure of the government that has not been included in the plan.

Internal Debt:

Internal Debt is the treasury bills and securities issued by the central government.

Foreign Loans:

It is the loan that is incurred from other countries and international institutions like the World Bank and IMF.

Revenue Deficit:

It is the difference between revenue expenditure and revenue receipt of the government.

Revenue deficit = Total revenue income - Total revenue expenditure

Revenue Surplus:

It is the opposite of revenue deficit.

Budgetary Deficit:

If the total receipts exceed the total expenditure, there will be a situation of budgetary excess, else there will be a budgetary deficit.

Value-Added Tax (VAT):

Value-Added Tax (VAT) is a tax that is levied on the price of a product or service at each stage of production, distribution, or sale to the end consumer. It is based on the difference between the value of the output and the value of the inputs used to produce it.

Posted By: Aalok Sensharma