Mrunal Interim Budget 2014 - Tax Vs Non-Tax Income & Expenditure

7/8/2014 Mrunal Interim Budget 2014: Tax vs Non-Tax income & Expenditure
http://mrunal.org/2014/02/budget-interim-budget-2014-revenue-part-non-tax-receipts-expenditureeffective-revenue-deficit-loans-interest-dividend-explained.html 1/26
[Budget] Interim Budget 2014 : Revenue Part: Non-Tax Receipts,
Expenditure,Effective Revenue Deficit, Loans, Interest, Dividend
classification explained
1. Prologue
2. Raju Guide (DevAnand)s budget
1. Revenue incoming
2. Non Tax Revenue
3. Revenue Outgoing
4. Raju Guides Capital Budget
5. Capital incoming (receipt)
6. Capital Outgoing (Expenditure)
3. Govt.s Annual financial statement
1. Non-Tax Revenue receipts of Government
2. [Table] NON-TAX REVENUE sources (Descending order)
3. Revenue Expenditure
4. [Table] REVENUE Expenditure (Descending order)
5. Revenue deficit
4. How did chindu manage to reduce the revenue deficit?
1. #1: increase in the non-tax income
2. #2: decrease in Revenue expenditure
3. Why Percentages did not change?
4. Revenue Deficit 3% in 2014-15, is it possible?
5. Effective Revenue deficit
Prologue
In the first article of interim budget 2014, we learned about tax vs non tax Revenue.
(click me).
Anyways, that wasnt really tough- even high school kid can understand direct vs indirect
tax. Now comes the bit more complicated parts-
1. classification of non-tax revenue vs capital receipts
2. classification of revenue expenditure vs capital expenditure
3. Internal classification of above parts.
Click to Enlarge
So, before we dwell into them, lets take a technically incorrect example/ case-study
involving
Raju Guide (DevAnand)s budget
DevAnand is a tourist guide. He can keep track of his business, like a normal middle
class professional: income vs expenditure. But he decides to maintain accounts like the
government.
Raju Guides Annual financial statement
Revenue part Capital part
incoming
outgoing incoming outgoing
Tax non-tax
Devanand is neither CA nor MBA(Finance). Nor he can afford to hire those
professionals. Therefore, to keep things simple, Dev follows three jugaad principles to
classify all the incoming and outgoing money:
1. Short-term (upto 1 year)= left side (Revenue part)
2. long term (beyond 1 year)= right side (Capital part)
3. Non-productive stuff= left side (revenue part)
Now lets start
Revenue incoming
Whatever money Dev earns within a year (and its recurring in nature- meaning next year
also, hell earn from the same sources). We can see this Ganga, gets water from two
smaller tributaries:
1. Tax revenue: but since DevAnand is neither a Government nor a Goonda, he
cannot extract tax. Therefore, all his short term incoming money is from the
second stream, which is.
2. non-tax revenue
Non Tax Revenue
This river gets money from various smaller streams:
#1: Income from direct sale of goods/services
DevAnand works as a tourist guide- he gets fees for services
DevAnand also own a bookstore near the railway station. He also earns money by
selling goods= books, magazines, souvenirs and (mostly) Rozgaar Samachaar.
^since he gets this money every year(=short term), and it is in recurring nature (because
hell earn it every year)=> therefore, well write this on left hand side of table (Revenue
part).
incoming outgoing incoming outgoing
Tax non-tax
NONE 1. direct sale of goods/services
#2: Income from Khairaat (Grant/charity/donation)
Once in a while, Dev also receives funding from UNESCO, Archeological survey,
culture ministry and foreign NGOs.
These are grants/aid = Not loans = Dev doesnt need to repay them in 10-20
years. So we cannot put them under Capital part (right side of the table).
Therefore, well put them on left hand side of table (Revenue)
Tax non-tax
NONE
1. direct sale of goods/services
2. Grants, aid, charity, donation
#3: income from investment
So far, Dev made money from selling goods/services, he also got some
grants/charity/donations.
he will invest some of this money into:
Investment in What will Dev earn?
1. Shares of LIC, ONGC etc dividend
2. Bank savings account / fixed deposit Interest
3. in his own bookstore @railway station Profit
Since hell earn these (dividend, interest, profit) on yearly basis = short term = revenue
side (left hand side of the table). now lets update
Revenue part (short-term) Capital part
Tax non-tax
NONE
1. Selling goods/services
2. dividend, profit, interest
3. grant, aid, donation
Governments annual financial statement also follows similar pattern, well see that
after a few paragraphs. But for the moment, lets continue with DevAnands case study.
Revenue Outgoing (Expenditure)
here, we focus on the short term expenditure (occurring on daily, monthly or yearly
basis)
#1: Input cost: Money spent to earn money
We learned DevAnand earns money (non-tax revenue receipt) by selling goods(books,
souvenirs) and services (as a tourist guide). but for that also, Dev has to incur some
expenditure, such as:
1. input cost/raw material: buying books, magazines, souvenirs from the
distributors.
2. Office establishment: on lightbill, phonebill etc.
3. On employees: salary, Provided fund contribution. Hiring some poor
kids/teenagers to lure tourists to him.
4. Commission paid to coolies and taxi drivers- so they recommend tourists to hire
Dev as their guide.
5. Advertisements in newspapers, posters around railway station, even on facebook!
These are all Short-term Expenditures- re-occurring on daily/monthly/yearly basis.
Therefore we putem under Revenue Expenditure (and not under capital Expenditure.)
#2: Interest paid
Dev had taken bank loans to purchase railway station bookstore, tourist bus/mini-
van and other big capital assets/goods. say Rs.10 crores @10% interest rate for
10 years.
A loan involves = Principal (10 crores) + Interest (10% annual).
The loan principle (10 crore) = Dev will have to pay it after 10-20 years=long
term= goes on right side (capital part).
BUT on such loans, Dev will have to pay interest every year= short term
recurring=Revenue part. (Left side).
Tax non-tax
NONE
1. Selling
goods/services
2. dividend,
interest, profit
3. grant, aid,
donation
(received)
1. Input cost: money
spent to earn money
2. Loan Interest paid
1. loan
taken
#3: Khairaat given (grants/aid/charity)
Previously, we saw that if UNESCO, ASI, Foreign NGO gives khairaat to
DevAnad (incoming money)=> we put under (non-tax) Revenue receipt.
so on the same logic IF DevAnand gives khairaat to someone (outgoing
money)=>then we must put it under revenue Expenditure.
Unlike LOANs, the grant/aid/charity cannot recovered after 10-20 years=>
therefore its short term Expenditure and as per Devs Jugaad principle everything
short term goes on left hand side. (Revenue part)
lets update our table
incoming (receipt) outgoing (Expenditure) incoming outgoing
Tax non-tax
NONE
1. by Selling
goods/services
2. Dividend,
interest, profit
3. Khairaat
received
spent to earn money
2. Interest paid (on
borrowed money)
3. Khairaat given
this pretty much sums up the Revenue part.
Revenue deficit
= difference between the incoming and outgoing money in revenue part.
=Revenue Expenditure MINUS Revenue receipt.
Raju Guides Capital Budget
Were done with left hand side of the table (Revenue part), now time for the right hand
part (capital)
Capital incoming (receipt)
As per DevAnands jugaad principle for finance and accounting:
short term = revenue
long term = capital
Accordingly, two streams from where, Capital money comes:
#1: Debt
all the loans taken by Dev.
since loan principal is repaid in long term (10-20) years=> falls under capital part
although loan is Borrowed money, but since for the time being it is
incoming=> therefore, well put all the loan borrowed under Capital receipt
loan can be from two sources: within India (internal) and from outside (External)
incoming (receipt)
outgoing (Expenditure) incoming outgoing
Tax non-tax
NONE
1. by Selling
goods/services
2. Dividend,
interest, profit
3. Khairaat
received
spent to earn money
2. Interest paid (on
borrowed money)
3. Khairaat given
#Debt
1. internal
2. external
#Non-Debt
Capital incoming #2: Non-Debt
a: principal recovered:
DevAnand himself had given loans to Prem Chopra in past.
Pran kept paying interest (and well put it under non-tax revenue of Dev)
but when Prem returns the original principal => thats money recovered in long
term=> falls under capital incoming.
b: Disinvestment
Dev had invested in shares of LIC, ONGC etc. 30-40 years. Now he wants to sell
them for quick return => this is also money recovered in long term (because his
original investment made years ago)
So, money earned by selling such shares= that is also capital receipt.
incoming (receipt)
outgoing
(Expenditure)
incoming outgoing
Tax non-tax
NONE
1. by Selling
goods/services
2. Dividend,
interest, profit
3. Khairaat
received
1. Input cost:
money spent
to earn money
2. Interest paid
(on borrowed
money)
3. Khairaat
#Debt
1. internal
2. external
#Non-Debt
1. loan
(principal)
given recovered
2. Disinvestment
Capital Outgoing (Expenditure)
two main sewers where money goes:
#1: loan (principal) given
revenue part capital part
loan interest (given/received) loan principle (given/received)
Suppose Dev gives Rs.1 crore as loan to Prem Chopra @10% interest, for 10
year.
The principal (Rs.1 crore) will be put under Capital Expenditure (because given
out for long term.)
The interest rate earned (10% per year) will be counted as non-tax revenue in
every years account. (Because its short term- re-occurring).
of course in real life, the EMI involves recovery of both principal + interest
rate=> so whatever portion comes as interest=> under non-tax Revenue incoming
and whatever principal is recovered => under capital incoming.
In other words
revenue part capital part
receipt
(incoming)
Expenditure
(outgoing)
receipt (incoming)
Expenditure
(outgoing)
http://mrunal.org/2014/02/budget-interim-budget-2014-revenue-part-non-tax-receipts-expenditureeffective-revenue-deficit-loans-interest-dividend-explained.ht 10/26
interest
received
interest
paid
Debt:
you borrowed Loan from
someone
Non-Debt:
loan principle recovered
(from the loans you had given
to someone)
You loaned
(Principle) to
someone.
#2: Purchase of capital assets/ capital goods.
Example
buying new tourist bus, mini-van, taxi
buying a hotel/restaurant for the tourists to stay
How is the different from the input cost on raw material? (buying sugar/milk/tea
powder)
raw material will vanish / exhaust after product is made (blank paper
=>magazine=>sold)
Capital asset/goods will stay with the entrepreneur, even after product is made
(blank paper =>printing press=>magazine.)
Capital asset depreciates (wears out with time). Entrepreneur gets tax benefit for
this depreciation. He will not get depreciation benefit on raw material (blank
paper, milk, sugar, tea etc.)
Anyways, lets make final table
incoming (receipt)
outgoing
(Expenditure)
incoming outgoing
Tax non-tax
NONE
1. by Selling
goods/services
2. Dividend,
interest, profit
3. Khairaat
received
1. Input
cost:
money
spent to
earn
money
2. Interest
paid (on
borrowed
#Debt (borrowed
Money/loans taken)
1. internal
2. external
#Non-Debt
1. loan
1. Loan
(principal)
given.
2. money spent
on capital
goods/assets
money)
3. Khairaat
given
(principal)
recovered
2. Disinvestment
THE END of DevAnand case study. now lets focus on governments annual
financial statement
Govt.s Annual financial statement
incoming (receipt)
outgoing (Expenditure) incoming outgoing
Tax non-tax
1. Direct (DONE)*
2. indirect (DONE)*
*weve already covered them in previous article. click me
Non-Tax Revenue receipts of Government
#1: by providing goods and services
List is not-exhaustive, but here are some examples:
All the money earned by Postal department.
Police income: E.g. CISF giving security to Infosys, airport etc. They have to pay
service fees to CISF.
UPSC, SSC: their exam fees, RTI fees
Defense
Money earned from government canteens
when DRDO sells some technology/patent/product to other PSU or foreign
government
Sci-Tech/healthcare
When AIIMs charges money for X-ray and various tests. (Although
government gives subsidy on them but still for accounting purpose weve to
count the money paid by junta as incoming non-tax revenue.
when ISRO sells patent/technology/services to state governments, private
companies, foreign governments/space agencies
Income By Ministries, example
Spectrum Auction => Ministry of Ministry of communication &
Information Technology.
India Yearbook 2014, Yojana Magazine etc. =>Ministry of Information and
broadcasting.
In Devs case, we listed such (non-tax) income as selling goods/services. but
government feels shy about admitting that they sell goods/services. Therefore, in
Governments annual financial statement, all such income is listed as Other receipts
or Other sources. Anyways, lets update the table
incoming (receipt)
outgoing
(Expenditure)
incoming outgoing
Tax non-tax
1. Direct
(DONE)
2. indirect
(DONE)
1. Other sources (selling
goods & services)
#2: by investment
Government has shareholding in LIC, Coal India, SAIL, SBI .so these
organization have to pay Dividend to Government (and all other shareholders).
[Important: if they sell such shares- thatll be disinvestment and fall under capital
receipt part].
If Government had given loan to any PSU, State/UT/Foreign government=>
theyve to pay loan interest. All such loan interest counted here.
#3: Khairaat (Grant /charity / aid)
received from World bank, foreign countries, private individuals etc. counted here
#4: UT without legislature
in the previous article, we saw that direct/indirect taxes collected by Diu Daman,
Andaman Nicobar etc UT (without legislature) => they are counted under Unions
(gross) tax revenue.
On the same logic, All the non-tax revenue collected by such UT w/o Legislature
= also counted under Union.
overall,
incoming (receipt)
outgoing
(Expenditure)
incoming outgoing
Tax non-tax
1. Direct
2. indirect
1. Other sources
2. dividend
3. interest
(received)
4. External Grant
5. from UT w/o LSR
For the MCQs, we need to know which source brings maximum non-tax revenue.
[Table] NON-TAX REVENUE sources (Descending order)
Non Tax (Cr.) BE 2013 RE 2013 BE 2014
1. Other receipts 78000 79788 80240
2. Dividend and Profits 73866 88188 77229
3. Interest receipts 17764 21018 19729
4. External Grants 1456 3135 2405
5. UT w/o LSR 1166 1097 1111
Total Non-Tax Revenue 172252 193226 180714
BE 2013 not really important because weve the revised estimates of 2013.
for RE2013 (1/4/2013 to 31/3/2014): bigger to smaller is: Dividend>>others
(selling goods / services)>>interest>>external grant>>UT.
Why? because Chindu had ordered the PSUs to declare big dividends (So he could
fillup the Revenue deficitmore given at the end of this article.)
for BE2014 (that is 2014-15), he doesnt plan to fetch large dividend from PSU (if he
extracts large dividends from PSUs every year, theyll be left with no money for
business-expansion.) Anyways for
BE2014: Bigger to smaller is .
Others (ie. by selling goods/services) >> dividend >> Interest >>Grant >>UT
so far, we are done with budget => revenue part=> incoming.
Now, its the time for
Revenue Expenditure
Overall, we can summarize it under
1. interest paid on the loans borrowed
2. Subsidies (because they are short term/non-productive, hence under Revenue
outgoing.)
3. money paid to produce those goods/services=> salary-pension-light bill
telephone bill (including defense, CRPF etc.)
4. Khairaat (grants) given to States/UT/Foreign countries
But in the annual financial statement, they put these things in a more refine manner.
Lets observe:
[Table] REVENUE Expenditure (Descending order)
Revenue Expenditure (Crores)
BE
2013
RE
2013
BE
2014
Interest PAID 370684 380066 427011
Subsidies 231084 255516 255708
Defence Services 116931 124800 134412
Pensions 70726 74076 80983
Grants to State/UT 76981 61617 69436
Police (NIA, CBI, + CRPF, BSF etc central armed
police forces.)
40895 43148 46427
General Services (President, PM, cabinet Secretariat,
judiciary, parliament, Tax collection, external affairs;
EC, CAG, UPSC, etc. bodies)
22903 23058 26824
Economic Services (Agro, Industry, power, telecom,
S&T etc. ministries and bodies)
24334 25459 26464
Social Services (Edu, Health, Broadcasting etc.
ministries and bodies)
23114 25438 24819
Postal Deficit 6717 5880 6908
Money given to States for Disaster/Calamity Fund 4800 4650 5050
revenue Expenditures of UT without LSR 4395 4442 4468
Grants to Foreign governments 4144 4188 4321
Numbers are not important. Ive already arranged them in descending order. The top five
are:
1. Interest paid to previous loan
2. Subsidies
3. Defense
4. Pension. (this is important: although pension is paid after 20-30 years of
service BUT pension doesnt count as capital Expenditure, it falls under revenue
Expenditure)
5. Grants to State/UT (important: if loans were given, we count them under
Capital Expenditure but grant=Revenue Expenditure).
Sidenote: if railway budget was not presented separately, then railway Expenditure
would also be counted under this Revenue Expenditure. (Just like weve done with
Postal dept.)
Revenue deficit
This is the difference between outgoing and incoming money in Revenue part.
= Revenue Expenditure MINUS Revenue receipt.
(You can also write it as Revenue receipt minus revenue Expenditure, in that cse youll
get answer in Negatives sign).
REVENUE (Crore Rs.) BE 2013 RE 2013 BE 2014
Expenditure 1436169 1399540 1550054
Receipt 1056331 1029252 1167131
Revenue Deficit (A-B) 379838 370288 382923
Revenue deficit as % of GDP 3.30% 3.30% 3%
What is the MCQ wisdom here?
Observe that in Feb 2013 (original Budget estimate) Chindu feared that revenue
deficit will be ~3.8 lakh crores.
But in Feb 2014 (Revised Estimate), the revenue deficit is quite lower: just ~3.7
lakh rupees. So the million dollar question is
How did chindu manage to reduce the revenue deficit?
Lets focus only on the revenue part of budget:
Incoming receipt
outgoing Expenditure
tax non-tax
did not fetch enough money
From the first article, you know that direct-indirect taxes did not bring expected amount
of cash. In fact, there was shortfall of ~77k crore rupees because of inflation and policy
paralysis.
So obviously, Chindu could have succeed in cutting down the Revenue deficit by only
two ways
1. Increase the incoming Revenue (from Non-tax Revenue receipts)
2. Decrease the outgoing Revenue (revenue Expenditure).
#1: increase in the non-tax income
1. Spectrum Auction: in Feb 2014. (In theory, it brought >60k crores but telecom
companies will pay in installments over next ten years. So, for the account year
2013-14 (ending @31
st
March 2014), this is ~18k crores.
Crores BE 2013 RE 2013 BE 2014
Other receipts 78000 79788 80240
recall that, when government sells goods/services and earns money=> they call it other
receipts. Spectrum auction money also count under other reciepts.
How much did Chindu earn more than expected?
RE2013 MINUS BE2013= ~80k minus ~78k=2k more.
Wait, I just said government fetched ~18k crore through spectrum auction. Then why
does it show only 2k here?
Because in Feb2013 (when Chindu presented BE2013), he would have made
projections that 48k crore from auction, but companies would pay installments
over 10 years so estimated income from spectrum for 2013-14 =~x crore rupees.
So, entire amount of 18k crore (first installment from spectrum auction) is not
surprise for him. It is just slightly higher than his original estimate.
2. Special dividend: Chindu ordered Coal India to pay high dividend (Rs.29 per
share). Since government is majority shareholder=> Chindu got ~15k crore
rupees from Coal India alone. Similarly, other PSUs also paid high level of
dividends => as a result high income from non-tax sources.
Crores BE 2013 RE 2013 BE 2014
Dividend and Profits 73866 88188 77229
Observe that in revised estimate (RE) he got (88k-74k)=~14k crores higher than
expected.
Wait a minute, I just said 15k from coal India, then why is it only ~14k higher than
expected? Because in BE2013 also, Chindu would have estimated that 8-10k crore from
coal India dividend. its not like entire 15k crore came as surprise.
3. External grants: he received almost 50% more than expected. see the t able
Non Tax (Cr.) BE 2013 RE 2013
External Grants 1456 3135
What about disinvestment? That counts under capital part. So ignore here. Well see in
next article.
#2: decrease in Revenue expenditure
1. DBT: In 2013: they implemented DBT (Direct benefit transfer) in >25 schemes.
= less subsidy leakages. + cost of delivering subsidy also decreased (as a result of
online banking transfer, less paper work and staff needed).
2. Postponed Oil subsidy payment: For the year 2013-14, Chindu had to pay
truckload of cash to Indian Oil, BPCL and HPCL. But out of that, he had
postponed the payment of ~35k crore rupees to after 31
st
March 2014. (meaning
itll not reflect in the accounts for 2013-14)= Revenue Expenditure automatically
down for 2013-14!= whaat an idea sirji.
3. Austerity measures: in Sep 2013, Chindu ordered ministries
i. dont hold seminars/conferences in 5star hotels
ii. dont buy new vehicles
iii. Dont give Executive class air tickets to bureaucrats. Make them pay full air
ticket for their wives and kids.
iv. While sending delegations to foreign countries- keep the number of
members minimum.
These measures helped saving ~15-20k crore rupees.
Although on the other hand, some Expenditure increased because of
1. LPG quota increase ( 9 to 12): another 5k crores subsidy burden. (but this
scheme starts from Feb 2014 onwards. while financial year 2013-14 will end on
31
st
March 2014= hence LPG subsidy burden wont bring that much pressure on
2013-14 compared to 2014-15).
2. One Rank one pension: for retired Defense personnel =another 500 crore
increased Revenue expenditure.
But overall, net impact is: revenue deficit lower than his original budget estimate.
REVENUE (Crore Rs.) BE 2013 RE 2013 BE 2014
Expenditure 1436169 1399540 1550054
Receipt 1056331 1029252 1167131
Revenue Deficit (A-B) 379838 370288 382923
Revenue deficit as % of GDP 3.30% 3.30% 3%
Why Percentages did not change?
In above table focus on BE2013 vs RE2013 columns.
You can see revenue deficit has decrease 379*** to 370***.
But still revenue deficit as % of GDP is same 3.3%.
How is this possible? Classic principle of data interpretation! Observe:
Month X Month Y
numerator A. Revenue deficit 25 20
denominator B.GDP (lakh crores) 100 80
% Revenue deficit as % of GDP (A*100/B) 25% 25%
Despite decrease in numerator, the % will not decrease IF denominator (Base) is
decreased.
Same way, inflation + policy paralysis= our GDP has gone down. Therefore,
despite lower revenue deficit (in absolute numbers), its % of GDP remains the
same (3.3%)
Revenue Deficit 3% in 2014-15, is it possible?
For 2014-15 (BE2014), Chindu is even more optimistic: that Revenue deficit will
be just 3% of GDP. Will it? Well depends. He has played his cards:
money chindus move Will it help achieving 3% target?
He did not change direct/indirect
in theory, no. but he hopes that
1. manufacturing sector export
will bring >300 billion
Revenue
incoming
taxes (except automobile, mobile
and a few things.)
dollars=> lot tax income
2. that economy will recover,
leading to automatic rise in
tax collection.
Revenue
outgoing
he allotted grant to venture capital
for SC, Nirbhaya Fund, Innovation
fund
Less than 1500 crore. hence hardly
any negative impact on revenue
deficit target
one rank one pension hardly any negative impact
Subsidies (including interest
subvention on farm loans,
education loans)
given below
Subsides
crore RE2013 BE2014
Subsides 2,55,516 2,55,708
You can see, he barely increased the subsidy allocation by ~200 crore rupees. So, again,
subsides unlikely to have negative impact. (as an absolute number 2.5 lakh crore is
very high, but the relative change is very small- just ~200 crore).
Speaking of subsidies, you might be wondering, Where does the plan and non-plan
expenditure fall?. It falls in the chart shown below
^this is just a preview, well see about Subsidies, plan vs non-plan in detail, in a separate
article later.
But overall, Chindu has played his cards appropriately- since it was an interim budget, he
did not announce major changes in tax, schemes and and subsidies. Therefore, 3%
revenue deficit target should not be hard to achieve, unless
1. new governments new budget is full of freebies and subsidies
2. GDP doesnt grow as expected.
3. economic problems in US/EU reduce the demand of Indian exports.
Effective Revenue deficit
we know that Revenue deficit = difference between incoming vs outgoing Revenue.
overall, the components were.
revenue incoming revenue outgoing
tax
non-tax
Interest paid
subsidies given
Salary, pension, office Expenditure.
Grants to state/UT/foreign countries.
Observe the last phrase: Grants given to State/UT.
such grants may be used for salary, office Expenditure= in that case we call it
Revenue Expenditure. BUT it may happen that state/UT uses the grant money for
creation of capital assets e.g. bridges, buildings, roads, hospitals etc.= then it is
not Revenue Expenditure.
it is capital Expenditure. We need to subtract it from Revenue deficit, to get the
real picture. Therefore,
Effective Revenue deficit= Revenue deficit MINUS grants given to State/UT for
creation of capital assets.**
**technically speaking, under FRBM act, grants given to following count
1. State Governments, UT
2. constitutional authorities or bodies,
3. autonomous bodies
4. other scheme implementing agencies
As long as theyre for creation of Capital assets. Anyway, lets check data: numbers
not important, only given to display the formula in action.
[Table] Effective revenue Deficit: absolute number
crores BE 2013 RE 2013 BE 2014
A. Revenue Deficit 379838 370288 382923
B. Grants given for creation of Capital assets 174656 121283 146581
Effective Revenue Deficit (A-B) 205182 249005 236342
[Table] Effective revenue Deficit: As % of GDP
As % of GDP BE 2013 RE 2013 BE 2014
Revenue Deficit -3.3 -3.3 -3
Effective Revenue Deficit -1.8 -2.2 -1.8
This ends the Revenue part of the budget. (both incoming vs Outgoing).
In the next article, well see
1. Capital part of budget: Capital receipt and Capital Expenditure.
2. Basics of Plan vs non-plan Expenditure.
3. Deficits: budget deficit, fiscal deficit, primary deficit. How did Chindu manage to
achieve 4.6% fiscal defect 4.6%.
After that,
1. subsidies, plan vs non plan allocation
2. Schemes, announcements, misc. highlights from the speech.
Visit Mrunal.org/Economy For more on Money, Banking, Finance, Budget, Taxation and
Economy.
URL to article: http://mrunal.org/2014/02/budget-interim-budget-2014-revenue-
part-non-tax-receipts-expenditureeffective-revenue-deficit-loans-interest-dividend-
explained.html
Posted By Mrunal On 22/02/2014 @ 02:35 In the category Economy

Mrunal Interim Budget 2014 - Tax Vs Non-Tax Income & Expenditure

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Mrunal Interim Budget 2014 - Tax Vs Non-Tax Income & Expenditure

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7/8/2014 Mrunal Interim Budget 2014: Tax vs Non-Tax income & Expenditure

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