Please enable JavaScript.
Coggle requires JavaScript to display documents.
6.1 Budget - Coggle Diagram
6.1 Budget
1) FinMin
Revenue
Tax
CBDT, CBIC; Tribunals; ED, Narcotics
Financial Service
e.g. BBB
Expenditure
Pay, Pension, CFI Spent
Investment and Public Asset Management
PSE privatization/disinvestment
Economic Affairs
Fiscal Policy, Budget
Public Enterprise
PSE admin, HRD etc
7) Misc
Automatic Stabilizer
income tax/corporate tax etc
Fiscal Consolidation/Prudence
dec Govt spending to control FD
Fiscal Stimulus
Interest Rate Growth Rate Differential
Loan Rate at which Govt borrowing - GDP Rate
India - 6-9=-3 -> Sustainable
Public Expenditure Management
Countercyclical Policy
go against economic cycle
Recession -> Govt inc expenditure & reduce tax -> reverse in Economic Boom
5) Deficit
Budget Deficit
Fiscal Deficit
Budget Deficit w/o borrowing in Capital Receipts
Budget Deficit + Borrowing
Revenue Deficit(5.1% of GDP)
Effective Revenue Deficit(4.1% of GDP) = RD - Grants for Capital Asset
Primary Deficit
FD - Interest paid on previous loans
Misc
Debt Financing
1) More Tax - Tax Evasion
2) More Borrowing -> to repay Govt may inc tax -> people start saving wrt future in high debt country -> growth dec
3) More Money Print -> hyperinflation
Crowding Out
less money for crowd to borrow due to Govt inc borrowing
Monetizing Deficit
High FD -> dec Credit Rating -> Unsold GSec -> Money Print -> Hyperinflation
6) Fiscal Responsibility & Budget Management Act, 2003
FD 4.5% by 2025-26 and PD 0 by 2022-23
Section 4(2)-Escape Clause
1) National Security/Act of War 2) National Calamity 3) Agri o/p & farm income collapse 4) GDP dec below x% 5) ₹ required for structural reforms in economy
2) Revenue
Recursive
Receipts
Tax
Direct
Indirect
Non-Tax
Selling Goods/Service
Divident & Profit
Interest Received
Grants Received
Expenditure
Grant Given
Subsidies
Interest Paid on Loan
Defence
Salary, Pension
3) Capital
Long Term/One Time
Receipts
Debt(Loan Taken)
Internal
External
Non-Debt
Loan Recovered
Disinvestment
Expenditure(dec order)
Capital Asset for Schemes/Dept etc
Debt to PSU/St/Foreign
Repaying Loan Principle on Internal Debt
Repaying Loan Principle on External Debt
4) ₹ Comes From -> Goes To
Borrowing > GST > Corporate = Income > Excise > Non-Tax Receipts > Custom > Non-Debt Capital Receipts
Interest repay > State Share on Tax > Central Sector > Central Sponsored > FC & Other Transfer > Defense > Other > Subsidies > Pension