Union Budget 2021-22 - Key Highlights of Union Budget

02 February, 2023

So here is an easy-to-understand guide that would help you decode the popular budget related terms.

Balance of Payments (BoP)

The Balance of Payments is a statement of all transactions made by a country with the rest of the world during a specific period. It includes both capital and current account transactions.
Budget briefcase or Bahi-Khata

A traditional Bahi-khata is a ledger wrapped in a red cloth that contains the budget documents as opposed to the long-standing tradition of carrying budget documents in a leather briefcase. It symbolizes our country’s departure from the slavery of western thought.
Capital expenditure (CapEx)

Capital expenditure or CapEx refers to the money spent on acquisition of assets like land, buildings, machinery, as well as investment in shares, the benefits of which extend years into the future.
Cess

Cess is a temporary tax levied by the government on a taxpayer over and above the base tax liability for fulfilling specific purposes.
Consolidated Fund of India

The consolidated fund refers to all the incomes and expenses incurred by the government in a financial year. Every transaction, other than exceptional items, is covered under this fund.
Consumer Price Index (CPI)

The CPI or Consumer Price Index is an index that refers to the relative change in the cost of living which is measured by collecting the change in prices of most common retail goods and services.
Contingency Fund of India

Contingency fund refers to an amount kept aside for meeting unforeseeable future events/emergencies
Current Account Deficit (CAD)

The current account deficit refers to the excess of imports from the value of exports by an economy for a financial year.
Dividend Distribution Tax

DDT or Dividend Distribution Tax is a tax on dividends out of profit, paid by a company to its shareholders.
Economic Survey

Presented two days before the Union Budget, the economic survey is a summary of the country’s annual economic development in a financial year.
Finance Bill

A part of the Union Budget, the Finance Bill contains all the legal amendments proposed by the finance minister for the changes in proposed taxation.
Fiscal Deficit

Fiscal deficit refers to the difference between the total income and total government expenditure in a financial year. It is reported in percentage of GDP or numbers.
Fiscal Policy in India

Fiscal policy refers to the adjustment made by the government to its expenses to influence the economy positively. It helps the government decide how much to spend on an economic activity and how much income it must earn for the economy to run smoothly.
Fringe Benefit tax

Organizations often lure high-level employees by offering fringe benefits, such as telephone reimbursement, employer’s contribution to the superannuation fund, etc. These are taxable and fall under fringe benefit tax.
Goods and Services Tax (GST)

GST is a form of indirect taxation on the supply of most goods and services sold domestically for consumption. It is to be paid by consumers.
Gross Domestic Product (GDP)

GDP or Gross Domestic Product refers to the total monetary value of finished goods and services produced in a country in a financial year.
Gross National Product (GNP)

GNP or Gross National Product refers to the total monetary value of finished goods and services produced by a country’s citizens in a financial year, irrespective of their location
Long-Term Capital Gains tax

LTCG or long-term capital gains tax refers to a tax levied on the profits earned from any long-term asset sale. It is a tax on the gains from the sale of eligible capital assets held beyond a specific time.
Monetary Policy

Monetary policy refers to the policy of the RBI to manage the interest rates, money supply and availability of credit in order to attain sustainable economic growth, liquidity and control inflation.
Revenue expenditure

Revenue expenditure refers to the Government’s expenses incurred for its operational needs, which does not result in the creation of assets.
Securities Transaction Tax

STT or Securities Transaction Tax is a direct form of taxation. It is levied on the purchase or sale of listed securities across India’s stock exchanges.
Short-Term Capital Gains Tax

STCG or short-term capital gains tax refers to a tax levied on profits generated from the sale of an eligible asset held for a short time.
Surcharge

A surcharge is an additional charge or tax.
Union Budget

Also known as the Annual Financial Statement in the Article 112 of the Constitution of India, the Union Budget is a projection of all the government’s revenue receipts and expenditures in the upcoming financial year.
Wholesale Price Index (WPI)

A Wholesale Price Index is an index that represents the changes in the prices of goods sold or traded in bulk at the wholesale level.

This glossary gives you a brief idea of the terms most commonly used in the Union Budget. The Union Budget 2023-24 is around the corner, and we hope it would be easier to understand it this time around.

Read more about the important economic terms you need to know about the Union Budget here.

*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.