Budget basics simplified: TOI explains receipts, expenditure, deficits, borrowing, and parliamentary approvals for understanding of govt finances

On Budget day, TOI breaks down key terms and concepts, helping readers quickly understand how govt finances, spending, and deficits are structured and explained

What are receipts?
Receipts show the money the govt receives. This includes the money the govt earns, and money it obtains through borrowings or loan recoveries from states.
What do Capital Receipts entail?Capital Receipts are funds that either reduce the govt’s assets or increase its debts. This includes money from sale of assets such as shares in public sector companies, and money received through borrowings or recovery of loans.
What is the relation between Revenue Receipts & govt’s assets or debts?
Revenue Receipts are the money the govt collects without affecting its assets or debts. These include earnings from taxes and other sources.
What does Capital Expenditure mean?
Capital Expenditure is spending that leads to the creation of assets or reduction of liabilities. This includes money used to build infrastructure.
What is termed as Revenue Expenditure?
Revenue Expenditure is govt spending that does not create assets or reduce liabilities. This includes salaries, pensions, subsidies, interest payments, and administrative expenses.
How is Net Borrowing calculated?
Net Borrowings refer to the total amount the govt borrows in a year after subtracting repayments of existing loans.
What is unpaid debt called?
Outstanding Debt is the total amount borrowed by the govt in the past that remains unpaid. The figure for a year indicates the debt outstanding at the end of that year.
Why Fiscal Deficit matters?
Fiscal Deficit occurs when the govt’s expenditure exceeds its receipts. It shows how much the govt needs to borrow during the year. If receipts exceed expenditure, there is a surplus.
Difference between revenue and receipts
Revenue Deficit is the difference between revenue expenditure and revenue receipts. It indicates how much the govt needs to borrow for non-capital (non-asset-creating) expenses.
What is Effective Revenue Deficit?
Effective Revenue Deficit is the revenue deficit minus grants given for the creation of capital assets.
How is Primary Deficit calculated?
Fiscal deficit minus interest payments. It shows the borrowing requirement excluding the interest obligations.
What is the main account for govt expenditures?
Consolidated Fund of India contains all govt receipts and is the main account from which govt expenditures are made
What expenditure needs Parl nod?
Voted Expenditure includes spending that must be approved by Parliament through the Demands for Grants
What does Finance Bill include?
Finance Bill is introduced along with the Budget and contains the govt’s taxation and financial proposals for the coming year
What does Appropriation Bill authorise?
Appropriation Bill authorises the govt to withdraw money from the Consolidated Fund. It is passed after the Demands for Grants are approved