Revenue Deficit: This is the difference between the revenue expenditure of the

government and the revenue receipts that are earned during the year. It shows
how much the regular expenses are more than the regular receipts. In 2012-13 the
revenue deficit was at Rs. 3.5 lakh crore or 3.4 per cent of the GDP.

Disinvestment: The process of selling the stake of the central government in
companies that it controls or in some cases where it has a small holding refers to
disinvestment. The amount that is raised by selling the stake is then applied for
either meeting normal expenditure of running the government or for special
projects like giving additional capital to banks. This has become a significant
source of revenue for the government and in 2012-13 the government put an
estimate of Rs. 30,000 crore on the amount that would be raised through
disinvestment.

Subsidies: These are the amounts spent by the government to provide goods and
services to the people of the country at prices that are lower than the market
rates. There are various areas in which the subsidies are spent and this includes
food, fertilisers, petroleum products and in the year 2012-13 it was estimated that
the amount spent on subsidies would be Rs 1.9 lakh crore.

Tax revenue: The amount that the government raises through levying taxes is
known as the tax revenue. The taxes through which the amount is raised
includes income tax, corporation tax, excise duty, customs duty and service tax.
In the year 2012-13 it was estimated that the total tax revenue would be around
Rs 7.7 lakh crore.

Plan expenditure: This is the expenditure that is incurred by the central
government in consultations with the Planning Commission for projects and in
areas related to the achievement of the goals set out in the 5 year plans. The
expenditure here is expected to result in creation of better infrastructure and
facilities across the country. In 2012-13 the total plan expenditure was estimated
at Rs. 5.2 lakh crore.

Non plan expenditure: This is the amount spent by the central government for
the day to day running of the country and it is based on what the priorities of the
government are. Expenses like salaries, pension, administrative costs, defence
expenses, subsidies are all under non plan expenditure. A total of Rs. 9.7 lakh
crore was estimated to be spent under the non-plan expenditure in 2012-13.

Debt servicing: The amount of debt servicing of the country that is mentioned in
the Union Budget consists of the total of the capital repaid during the year along
with the interest payments made on loans. This shows the amount that is spent
in managing the debt of the country. In 2012-13 the debt servicing expense was
estimated at Rs. 4.44 lakh crore or 34 per cent of the total revenue expenditure of
the government.

Fiscal deficit: This is the difference between the total expenditure of the
government in a year and the revenue receipts and the recoveries of loans. This
also represents the amount that the government will have to borrow to fund its
shortfall. The lower the revenue deficit the better it is for the country and in the
year 2012-13 the fiscal deficit was estimated at Rs. 5.13 lakh crore or 5.1 per cent
of the GDP

Primary deficit: This is the amount that is arrived at when the fiscal deficit is
reduced by the interest payments for the year. It shows the amount of the deficit
that arises on account of the activities other than the interest payments and a
large difference between the fiscal deficit and the primary deficit is a worrying
sign that interest payments have become very large in the economy. In 2012-13
the primary deficit was estimated at Rs. 1.93 lakh crore or 1.9 per cent of the
GDP.

Deductions: This refers to the amounts that will be allowed as a reduction from
the total taxable income of the taxpayer. The final tax is calculated on the taxable
income after considering the deductions so this helps to reduce the taxable
income and consequently the tax to be paid and hence deductions are eagerly
awaited by all taxpayers so that they can make the most out of it.