Annual Financial Statement
Annual Financial Statement shows estimated receipts and expenditure of the Government. The receipts and disbursements are shown under the three parts, in which Government Accounts are kept, viz. (i) Consolidated Fund, (ii) Contingency Fund, and (iii) Public Account.
It is a Money Bill presented to Parliament for its approval, so that the government can withdraw from the Consolidated Fund the amounts required for meeting the expenditure charged on the Consolidated Fund. No amount can be withdrawn from the Consolidated Fund till the Appropriation Bill is voted and enacted.
Capital Budget consists capital receipts and capital payments. Capital receipts are loans raised by Government from public, called market loans, borrowings by Government from Reserve Bank and other parties through sale of Treasury Bills, loans received from foreign Governments and institutions, disinvestment receipts from public enterprises and recoveries of loans from State and Union Territory Governments and other parties. Capital payments consist of capital expenditure on acquisition/building of assets like land, buildings, machinery, equipment, as also investments in shares, etc., and loans and advances granted by Central Government to State and Union Territory Governments, Government companies, Corporations and other parties.
Charged expenditure consists of expenses which do not require the sanction of Parliament, such as the emoluments of the President of India, Judges of the Supreme Court, etc.
It consists of the governmentï¿½s budget support to the Plan and the internal and extra budgetary resources raised by public enterprises.
Consolidated Fund is made up of all revenues received by the government, loans raised by it, and also its receipts from recoveries of loans granted by it. All expenditure of the government is incurred from the Consolidated Fund and no amount can be withdrawn from the Fund without authorisation from Parliament.
Contingency Fund is an imprest held on behalf of the President by a Secretary to the Government of India in the Ministry of Finance, and is used by the Government for the purposes of meeting all its urgent and unforeseen expenditure. Parliamentary approval for such expenditure and for withdrawal of an equivalent amount from the Consolidated Fund to recoup the Contingency Fund is subsequently obtained. e corpus of the Contingency Fund as authorized by Parliament presently stands at Rs 500 crore.
It is the difference between fiscal deficit and interest payments.
Primary Deficit = Fiscal Deficit ï¿½ Interest payment
Demands for Grants
The estimates of expenditure from the Consolidated F und included in the Annual Financial Statement and required to be voted by the Lok Sabha are submitted in the form of Demands for Grants. Generally, one Demand for Grant is presented in respect of each Ministry or Department. In regard to Union Territories without Legislature, a separate Demand is presented for each of the Union Territories. In the Union Budget for 2013-14 there are 106 Demands for Grants. Each Demand first gives the totals of ï¿½votedï¿½ and ï¿½chargedï¿½ expenditure as also the ï¿½revenueï¿½ and ï¿½capitalï¿½ expenditure included in the Demand separately, and also the grand total of the amount of expenditure for which the Demand is presented. This is followed by the estimates of expenditure under different major heads of account.
The breakup of the expenditure under each major head between ï¿½Planï¿½ and ï¿½Non-Planï¿½ is also given.
MODVAT stands for Modified Value Added Tax which was introduced in India in 1986. MODVAT Scheme essentially follows VAT Scheme of taxation, i.e. if a manufacturer A purchases certain components (raw materials) from another manufacturer B for use in its product, B would have paid excise duty on components manufactured by it and would have recovered that excise duty in its sales price from A. Now, A has to pay excise duty on product manufactured by it as well as bear the excise duty paid by the supplier of raw material B. Under the MODVAT scheme, a manufacturer can take credit of excise duty paid on raw materials and components used by him in his manufacture. It amounts to excise duty only on additions in value by each manufacturer at each stage.
CENVAT stands for Central Value Added Tax. MODVAT was renamed as CENVAT in 2000 and was further restructured to include service tax in 2002. Under the CENVAT Scheme, a manufacturer of final product or provider of taxable service shall be allowed to take credit of duty of excise as well as of service tax paid on any input received in the factory or any input service received by manufacturer of al product. The bulk of what is commonly termed ï¿½excise collectionsï¿½ in India now takes place under the framework of the CENVAT.
Central GST stands for Central goods and services tax and refers to the proposed central levy on goods and services along the VAT principle. s is in contrast to the current system, where taxes are levied separately on goods and services. Central GST would replace the existing CENVAT and the existing Service tax.
Written by princy