Chief Minister Conrad K Sangma also the minister-in-charge of finance, on March 9, presented a Rs 18,881 cr deficit budget in the assembly.
Here is an explainer to the various terms that will help you to understand the budget analytically.
Gross State Domestic Product (GSDP): It is the sum total of the value of all the goods and services produced by a state during a specified period of time. For the states in India, it is measured by the Central Statistics Office.
Fiscal policy: Fiscal policy is the way through which the government plans out its revenue and expenditure strategy for influencing economic conditions.
Fiscal deficit: If a government is spending more than its income, the extra borrowing the government has to make to balance the income and expenditure is called the fiscal deficit.
Capital expenditure: Capital expenditure is the one-time amount spent for creating fixed assets, which could be used for revenue generation over a period of time. Example: If a government is spending to construct roads and hospitals, it will be counted as capital expenditure.
Revenue expenditure: It is the amount of money the government spends to maintain fixed assets, or to give out interest payments and subsidies. Example: If a government is spending to repair potholes on the road, it will be counted as revenue expenditure.
Capital receipt: Capital receipts are those which either create a liability or reduce assets. They are non-recurring in nature. Example: Loans, selling of non-operational fixed assets.
Revenue receipt: Revenue receipts, or current receipts, are those which neither create a liability nor reduce assets. They are recurring in nature and are earned during the government’s normal course of business. Example: Selling of services by the government like electricity.
Revenue deficit: Difference between the revenue expenditure and revenue receipt is known as revenue deficit.
Tax devolution: The share of money which states receive from the taxes collected by the central government. There are two types of devolutions: Vertical (from union to the states) and horizontal (among the states themselves).
Capital and Revenue Account: These are the two main accounts a government has. Capital account has all the capital receipts and payments of the government. Revenue accounts include the revenue receipts and all other forms of revenue a government receives from its businesses and services.
Tax revenue: The funds received by a government through taxation of individuals and companies (direct taxes), or by taxing goods and services (indirect taxes). For example: Income tax, GST, etc.
Non-tax revenue: The funds received by a government other than from taxes. For example: Interest from lendings, auctions, etc.
Budget Estimates: Popularly used in the form of the acronym B.E. in the budget documents, is the amount of money a government allocates in the budget of a financial year to various schemes, departments and sectors.
Revised Estimates: Popularly used in the form of the acronym R.E. in the budget documents, takes into account a mid-year review where possible expenditures or requirement of funds exist. Basically, if the funds of Budget Estimates are insufficient, then a revised estimate is made to accommodate for the additional requirements. The RE and BE will be the same if no additional requirements for expenditure exist.