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Presentation1.ppt on budget
 

Presentation1.ppt on budget

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    Presentation1.ppt on budget Presentation1.ppt on budget Presentation Transcript

    • MEANING OF BUDGET• BUDGET (FROM FRENCH WORD BOUGETTE, PURSE) GENERALLY REFERS TO A LIST OF ALL PLANNED EXPENSES AND REVENUES. ... AN ANNUAL PROPOSAL THAT OUTLINES THE ANTICIPATED FEDERAL REVENUE AND DESIGNATES PROGRAM EXPENDITURES FOR THE UPCOMING FISCAL YEAR.
    • DEFINITIONS• TAYLOR – “ A BUDGET IS THE MASTER FINANCIAL PLAN OF THE GOVERNMENT. IT BRINGS TOGETHER ESTIMATES OF ANTICIPATED REVENUE AND PROPOSED EXPENDITURE FOR THE BUDGETED YEARS”.
    • According to BASTABLE• THE BUDGET HAS COME TO MEAN THE FINANCIAL ARRANGEMENTS OF A GIVEN PERIOD, WITH THE USUAL IMPLICATIONS THAT THEY HAVE BEEN SUBMITTED TO THE LEGISLATURE FOR APPROVAL
    • According to FINDLAY SHIRRAS• THE BUDGET IS AN ANNUAL STATEMENT OF EXPENDITURE AND REVENUE TO MEET THAT EXPENDITURE PREPARED BY PUBLIC AUTHORITIES AND USUALLY COVERS ATLEAST TWO FISCAL PERIODS-THE CLOSING PERIOD AND THE PERIOD TO COME .
    • IN THE WORDS OF MUNRO• BUDGET IS A PLAN OF FINANCING FOR THE INCOMING FISCAL YEAR.THIS INVOLVES AN ITEMISED ESTIMATE OF ALL REVENUES ON THE ONE HAND AND ALL EXPENDITURES ON THE OTHER
    • A SUMMARY OF THE ABOVE DEFINITIONS• ON THE BASIS OF THE DEFINITIONS WE CAN STATE THAT A BUDGET IS :1. A statement of expected revenue and proposed expenditure;2. It has to sanctioned by the authority;3. It is for a particular period-a year;4. It puts forth conditions regarding the procedures involved in the collection of revenue and the expenditure to be incurred.
    • MEANING OF BUDGET• HENCE A BUDGET IS A STATEMENT OF THE ESTIMATED REVENUE AND EXPENDITURE OF THE GOVERNMENT IN RESPECT TO A PARTICULAR FINANCIAL YEAR.
    • IMPORTANCE OF BUDGET1. It sets a frame work for policy formulation2. Budgeting is a means of policy implementation3. A budget is a means of legal control4. It is a tool of accountability5. It is a tool of management6. It is an instrument of economic policy
    • BUDGET IS CONCERNED WITH THREE PERIODS1. THE ACTUAL REVENUE AND EXPENDITURE OF THE PREVIOUS YEAR [if the current year is 2009-10 then 2008-09 will be the preious year]2. THE REVISED ESTIMATES OF REVENUE AND EXPENDITURE OF THE CURRENT YEAR.3. ESTIMATES OF REVENUE AND EXPENDITURE FOR THE NEXT FINANCIAL YEAR.
    • COMPONENTS OF BUDGET• Revenue receipts• Capital receipts• Revenue expenditure• Capital expenditure THUS A BUDGET HAS TWO MAIN COMPONENTS :[A] RECEIPTS ,[B] EXPENDITURE.
    • COMPONERNTS OF BUDGET • RECEIPTS• A. REVENUE RECEIPTS [1+2 ]• 1. TAX REVENUE• 2. NON –TAX REVENUE• B. CAPITAL RECEIPTS [3+5]• 3.RECOVERY LOANS• 4.OTHER RECEIPTS• 5.BORROWING & OTHER LIABILITIES• TOTAL RECEIPTS = A+B
    • A.REVENUE RECEIPTS D.REVENUE EXPEND.A.1.TAX REVENUE 6.ON NON PLAN ACC.2.NONTAX REV 7.ON PLAN ACCOUNTB.CAPITAL RECEIPTS. E.CAPITAL EXP.[8+9][3+4+5]3.RECOVERY OF LOAN 8.ON NON PLAN ACC.4.OTHERB RECEIPTS 9.ON PLAN ACCOUNT5.BORROWINGS AND F.TOTAL EXP.[D+E]OTHER LIABILITIES G.BUDGE.DEFI-F-C H.REV. DEFI D-AC.TOTAL RECEIPTS-A+B I.FISCAL DEFICIT[F_(A+3+4)]
    • EXPENDITURE • EXPENDITURE• A. REVENUE EXPENDITURE [1+2]• 1 ON PLAN ACCOUNT• 2 ON NON PLAN ACCOUNT• B.CAPITAL EXPENDITURE
    • RECEIPT ITEMS OF THE BUDGET RECEIPT ITEMS OF BUDGETREVENUE CAPITALRECEIPTS RECEIPTS
    • REVENUE RECEIPTS
    • TAX REVENUE• TAX REVENUE INCLUDES ALL THE REVENUES EARNED THROUGH VARIOUS KINDS OF TAXES.TAXES ARE BROADLY DIVIDED INTO DIRECT & INDIRECT TAXES.
    • DIRECT TAXES1. CORPORATION TAX2. INCOME TAX3. INTEREST TAX4. WEALTH TAX5. GIFT TAX6. EXPENDITURE TAX
    • INDIRECT TAX1. CUSTOM DUTIES2. EXCISE DUTIES3. SALES TAX4. SERVICE TAX
    • NON TAX REVENUE• IT INCLUDES THE REVENUE ACCRUING TO THE GOVERNMENT FROM SOURCES OTHER THAN TAX.THESE ARE ;1. INTEREST RECEIPTS2. DIVIDENDS3. GRANTS4. FINES
    • CAPITAL RECEIPTS• THESE INCLUDE BORROWING OF THE GOVERNMENT.SINCE THESE RECEIPTS HAVE TO BE REPAID BY THE GOVERNMENT ,THE CAPITAL RECEIPTS ARE LIABILITIES.CAPITAL RECEIPTS INCLUDE PUBLIC BORROWING ,RECIVERY OF LOANS AND RESALE OF SHARES AND BONDS HELD BY THE GOVERNMENT.
    • EXPENDITURE ITEMS EXPENDITURE REVENUE CAPITALEXPENDITURE EXPENDITURE
    • REVENUE EXPENDITURE• IT IS THE EXPENDITURE INCURRED FOR THE DAY-TO-DAY FUNCTIONONG OF THE GOVERNMENT DEPARTMENTS AND VARIOUS SERVICES OFFERED TO THE PEOPLE, PAYMENT OF INTEREST ON BORROWINGS,SUBSIDIES ETC.• REVENUE EXPENDITURE WILL NOT RESULT IN THE CREATION OF ASSETS
    • REVENUE EXPENDITURE• IT IS THE EXPENDITURE INCURRED FOR THE DAY-TO-DAY FUNCTIONONG OF THE GOVERNMENT DEPARTMENTS AND VARIOUS SERVICES OFFERED TO THE PEOPLE, PAYMENT OF INTEREST ON BORROWINGS,SUBSIDIES ETC.• REVENUE EXPENDITURE WILL NOT RESULT IN THE CREATION OF ASSETS
    • CAPITAL EXPENDITURE• CAPITAL EXPENDITURE IS THE EXPENDITURE INCURRED ON CREATING PERMANENT ASSETS.SUCH EXPENDITURE IS INCURRED ON ITEMS LIKE CONSTRUCTION OF BUILDINGS,ROADS,BRIDGES,CANALS, POWER PLANTS,CAPITAL EQUIPMENTS
    • REVENUE RECEIPTS• THE REVENUE RECEIPTS REFER TO ALL RECEIPTS RECEIVED DURING BY THE GOVERNMENT FRM
    • Taxation• Meaning : Non quid pro quo transfer of private income to public coffers by means of taxes.• Classified into1. Direct taxes- Corporate tax, Div. Distribution Tax, Personal Income Tax, Fringe Benefit taxes, Banking Cash Transaction Tax2. Indirect taxes- Central Sales Tax, Customs, Service Tax, excise duty.
    • Government Expenditure It includes :• Government spending on the purchase of goods & services.• Payment of wages and salaries of government servants• Public investment• Transfer payments
    • EXPENDITURE HEADS- 2009-10 BUDGET RUPEE GOES TO 7% CENTRAL PLAN 4% 18% INTEREST PAYMENTS15% DEFENCE SUBSIDIES OTHER NON-PLAN EXPEN 20% STATES SHARE OF TAXES14% NON-PLAN ASSIST. TO STA 9% 13% PLAN ASSISTANCE TO STA
    • RECEIPTS OF 2009-10 BUDGET Where does the Rupee come from BORROWINGS & 10% 1% OTHER LIABILITIES 6% 29% CORPORATION TAX10% INCOME TAX CUSTOMS 10% EXCISE 12% 22% OTHER TAXES NON-TAX REVENUE NON-DEBT CAPITAL
    • RUPEE COMES FROM 2009-10
    • RUPEE GOES TO
    • TOTAL RECEIPTS
    • TOTAL EXPENDITURE
    • BUDGET OF 2011-12
    • CUSTOMS DUTY
    • DIRECT TAXES
    • FISCAL DEFICIT