Class 12 Economics - Govt Budget
1. Components of Budget
- Revenue Budget: Recurring nature.
- Revenue Receipts: Tax (GST, Income Tax) + Non-Tax (Fines, Profits).
- Revenue Expenditure: Salaries, Pensions, Subsidies.
- Capital Budget: Creates asset or reduces liability.
- Capital Receipts: Borrowings, Disinvestment (Selling PSUs).
- Capital Expenditure: Building roads, Repaying loans.
2. Measures of Deficit
- Fiscal Deficit: Total Exp - Total Receipts (excluding borrowings). Indicates total borrowing requirements.
- Revenue Deficit: Revenue Exp - Revenue Receipts.
- Primary Deficit: Fiscal Deficit - Interest Payments.
3. Objectives
- Reallocation of Resources: Taxing harmful goods (cigarettes) and subsidizing useful ones (Khadi).
- Reducing Inequalities: Progressive tax structure (Rich pay more).
- Economic Stability: Preventing inflation/deflation.
Fiscal Deficit formula is the most asked numerical! 📉💰
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