India Inc is not expecting any major announcement for itself in Budget 2008-09 as Finance Minister P Chidambaram is likely to focus on higher budgetary allocations to ensure growth of sensitive sectors like agriculture, education, health, defence and manufacturing, an Assocham survey said.
The Budget is likely to be "traditional" for India Inc since the key challenge for the government is to sustain the growth momentum, the survey said.
"The government should ensure that the manufacturing sector grows at 15 per cent and inflation remains below the five-per cent mark for the next 10-15 years. Thrust should be given to development of agriculture and industry," it said.
About 85 per cent of the 300 CEOs polled said the forthcoming Assembly elections notwithstanding, the Finance Minister may not dole out fiscal concessions for India Inc.
The common man, and not India Inc, is likely to gain more from the Budget as "the government would like to maintain growth inertia and honour its commitments to improve infrastructure and agriculture.”
"There may be no significant tax cuts since Chidambaram's top priority will be to hike his revenue collections for higher budgetary allocations to agriculture, education, health, defence and manufacturing," an Assocham release said.
About 255 CEOs said subsidies for sectors such as food, fertiliser and petroleum may also be hiked by 10 per cent, while 90 per cent of them said the Finance Minister may strike a balance and present a Budget that appeases Indian industry.
Whereas about 260 CEOs felt that personal income tax ceiling would be raised by nearly Rs 30,000. 15 per cent of them maintained their demand for a reduced taxation structure would not be ignored and there could be some legitimate cuts in the duty structure in the Budget.
Friday, February 15, 2008
Relationships: Your money or mine?
There is much, they say, that makes a marriage difficult. And adding to the woes of the 21st century Metro Marriage, there’s a new-improved villain, not infidelity and cheating partner, but money.
With rising prices, growing aspirations and a desire to provide all, many marriages have both partners working today. However, with more disposable income, there are more differences regarding money as well.
Many a research shows that money is by far one of the biggest reasons why couples fight. Some don’t disclose their income to their partners, others keep a tight hold on the purse strings or still others don’t share details of how they spend their money. In fact, a recent research by Internet company PayPal showed that 82 per cent of the respondents hid their shopping bags from partners.
But is it not strange that when a marriage is ideally a partnership on sharing and trust, the sharing of money should create so many problems?
“Not really,” says clinical psychologist Dr Madhumati Singh, “Money has always been a reason for dispute and a means of control in a marriage. Earlier, there weren’t as many problems because it was usually only one person who brought in the money and that person controlled the spending of it too. But with women beginning to earn as well, that status quo has shifted. Today, money has become one of the biggest factors, that ‘unreachable’ goal that causes couples to fight and even break away,” Dr Singh adds.
Money means Power
Quite true too. Think about the generation of our parents and grandparents. It was usually the father who brought in the money and the father who decided where and how it was to be spent. The mothers were usually given a pre-allocated amount to run the house and perhaps for pocket money as well. There were cribbing and fights over how much money was allocated, but on the whole, monetary decisions were pretty much a one-man show.
Now, consider the following situations:
Scene 1: The petrol station
En route to office, Ronit and Rajni stopped at the petrol pump. As Ronit lowered his window, he asked Rajni for Rs 500. She looked at him, her eyes narrowed, “I paid for petrol two days back too, you owe me…” “Yes, yes, I remember, can you pay it now? I will return the money this evening,” Ronit said impatiently. Ronit and Rajni have been married for nine years now and have two kids, aged 8 and 4.
Scene 2: The movie hall
“It’s your turn to buy the tickets,” said Prakash, “I bought the ones for Spiderman.”
Lata quickly took out the money and as she handed it to him, added, “But you are paying for the popcorn and drinks, it has to be equal.” Prakash shrugged. They have been married for a year and a half.
Both the above scenarios would perhaps not have happened in the single-person-earning marriage module But given the Metro Marriage scenario – both partners work, kids are looked after by a family member or a nanny and either or both parents have bad working hours – reaching a mutually acceptable decision about money is becoming tougher by the day.
The reason? According to Dr Singh, it’s a “shift in the power status. Since both partners work and earn their money, no one wants to lose control or give up the power. While earlier women were content with the husband’s decision, financial independence has lead the women to want to know where their money is going, how is it being spent, etc.”
Reasons why couples fight
As Dr Singh points out, trouble comes in various shapes in a marriage, but mostly it has to do with power and trust issues regarding money. “The one who controls the money, controls the decisions in the family,” is what she says.
Some people shop clandestinely without telling their partners. Others don’t consult their partners when making a big purchase that blows the budget. Remember the scene in Jhankar Beats where Sanjay Suri’s character buys a synthesizer while wife, Juhi Chawla had been saving up for their soon-to-come baby. That was the only time the couple – otherwise shown to be rather lovey-dovey – fight in the movie.
Similarly there are wives who secretly stash money and don’t tell the husbands, or partners who lie about the cost of a certain purchase. Riya, 29, divorced after two years of marriage, recounts, “I had quit my job after marriage as I wanted to take a break. However, my then-husband started asking for bills for everything. If I went to beauty parlour, he would ask me the cost of each of the services I wanted and would give me only that much money. I had always been an independent person, all that was too much.”
Like Riya’s former husband, there are many who insist that partners keep bills for every purchase. Credit cards, different spending habits, debt repayment… here are money brings with it a whole new set of problems for marriages.
Here are the top five reasons why couples fight over money:
1. Different priorities: ‘You always waste money’
One of the most common reasons for fights is when one partner thinks that his/her purchases are needed; the other feels that it’s a waste of money. So he thinks that spending on linen and pretty things is a waste while she feels that buying five Bose speakers is really blowing the budget.
Experts say the best way to stop cribbing is to sit and talk out how you view each other’s purchases and advice that if there is surplus, both parties should make leeway for some ‘unnecessary’ purchases. However, if there is a crunch, both partners should share the responsibility.
2. Credit card: ‘Our debt and your debt’
While plastic might have made life easier, it sure has made paying back a lot tougher, especially when it comes to couples. The common gripe: If he spent it on his office colleagues, then he should pay it back.
Experts say that couples should clearly keep aside some money for personal spending, money that does not affect the budget or running of the house. It’s also advised that if there are any debts that are hanging from either partner’s single days, it should be mutually decided whether one partner or both would repay that.
3. Saving versus spending: ‘Who decides?’
Again, when one person controlled the money, it was pretty much s/he who decided the spending/saving pattern too. With both partners earning, both want a say in how much is spent, where it’s spent and what and how it’s saved. Here if one partner is a spendthrift and the other too cautious, it could lead to friction.
Experts suggest conversation and clearly deciding on spending and saving budgets. If one partner decides money matters, it is advised that s/he should not get all dictatorial about it.
4. Balancing the scale: ‘He who earns more, pays more’
Distribution of housework and distribution of bill payment lead to the biggest fights. If who does how much work around the house - given that Metro Marriages have both partners working outside the home as well - is always a cause for debate, monetary contributions come a close second. He feels that she should pay some of the EMIs as well while she insists that since she earns lesser, she would only pay for small-ticket household items.
Experts suggest sitting down together or with a chartered accountant to chalk out what all has to be paid on a monthly basis and then either starting a joint Household Expenses record. Given the disparities in earning, couples could either decide to put in equal amounts or whatever either is comfortable with. This decision should be a mutual one.
5. It’s a question of trust: ‘Your money is pocket money, my money is saving?’
While the role of the woman vis-à-vis earning money and managing the household is changing, the transition is not always a smooth one. Men have been handling home loans and mortgages for long. Today fights often erupt when only one partner contributes to the house/saving/investment while the other simply squanders.
Many men complain that the wives - despite earning a good amount - treat their own money as extra pocket money while the entire burden of the house still falls on the man. Experts say that both partners have to work at trusting each other where money matters are concerned. If one partner is a spendthrift and the other feels the brunt of it, sitting and discussing things are in order.
With rising prices, growing aspirations and a desire to provide all, many marriages have both partners working today. However, with more disposable income, there are more differences regarding money as well.
Many a research shows that money is by far one of the biggest reasons why couples fight. Some don’t disclose their income to their partners, others keep a tight hold on the purse strings or still others don’t share details of how they spend their money. In fact, a recent research by Internet company PayPal showed that 82 per cent of the respondents hid their shopping bags from partners.
But is it not strange that when a marriage is ideally a partnership on sharing and trust, the sharing of money should create so many problems?
“Not really,” says clinical psychologist Dr Madhumati Singh, “Money has always been a reason for dispute and a means of control in a marriage. Earlier, there weren’t as many problems because it was usually only one person who brought in the money and that person controlled the spending of it too. But with women beginning to earn as well, that status quo has shifted. Today, money has become one of the biggest factors, that ‘unreachable’ goal that causes couples to fight and even break away,” Dr Singh adds.
Money means Power
Quite true too. Think about the generation of our parents and grandparents. It was usually the father who brought in the money and the father who decided where and how it was to be spent. The mothers were usually given a pre-allocated amount to run the house and perhaps for pocket money as well. There were cribbing and fights over how much money was allocated, but on the whole, monetary decisions were pretty much a one-man show.
Now, consider the following situations:
Scene 1: The petrol station
En route to office, Ronit and Rajni stopped at the petrol pump. As Ronit lowered his window, he asked Rajni for Rs 500. She looked at him, her eyes narrowed, “I paid for petrol two days back too, you owe me…” “Yes, yes, I remember, can you pay it now? I will return the money this evening,” Ronit said impatiently. Ronit and Rajni have been married for nine years now and have two kids, aged 8 and 4.
Scene 2: The movie hall
“It’s your turn to buy the tickets,” said Prakash, “I bought the ones for Spiderman.”
Lata quickly took out the money and as she handed it to him, added, “But you are paying for the popcorn and drinks, it has to be equal.” Prakash shrugged. They have been married for a year and a half.
Both the above scenarios would perhaps not have happened in the single-person-earning marriage module But given the Metro Marriage scenario – both partners work, kids are looked after by a family member or a nanny and either or both parents have bad working hours – reaching a mutually acceptable decision about money is becoming tougher by the day.
The reason? According to Dr Singh, it’s a “shift in the power status. Since both partners work and earn their money, no one wants to lose control or give up the power. While earlier women were content with the husband’s decision, financial independence has lead the women to want to know where their money is going, how is it being spent, etc.”
Reasons why couples fight
As Dr Singh points out, trouble comes in various shapes in a marriage, but mostly it has to do with power and trust issues regarding money. “The one who controls the money, controls the decisions in the family,” is what she says.
Some people shop clandestinely without telling their partners. Others don’t consult their partners when making a big purchase that blows the budget. Remember the scene in Jhankar Beats where Sanjay Suri’s character buys a synthesizer while wife, Juhi Chawla had been saving up for their soon-to-come baby. That was the only time the couple – otherwise shown to be rather lovey-dovey – fight in the movie.
Similarly there are wives who secretly stash money and don’t tell the husbands, or partners who lie about the cost of a certain purchase. Riya, 29, divorced after two years of marriage, recounts, “I had quit my job after marriage as I wanted to take a break. However, my then-husband started asking for bills for everything. If I went to beauty parlour, he would ask me the cost of each of the services I wanted and would give me only that much money. I had always been an independent person, all that was too much.”
Like Riya’s former husband, there are many who insist that partners keep bills for every purchase. Credit cards, different spending habits, debt repayment… here are money brings with it a whole new set of problems for marriages.
Here are the top five reasons why couples fight over money:
1. Different priorities: ‘You always waste money’
One of the most common reasons for fights is when one partner thinks that his/her purchases are needed; the other feels that it’s a waste of money. So he thinks that spending on linen and pretty things is a waste while she feels that buying five Bose speakers is really blowing the budget.
Experts say the best way to stop cribbing is to sit and talk out how you view each other’s purchases and advice that if there is surplus, both parties should make leeway for some ‘unnecessary’ purchases. However, if there is a crunch, both partners should share the responsibility.
2. Credit card: ‘Our debt and your debt’
While plastic might have made life easier, it sure has made paying back a lot tougher, especially when it comes to couples. The common gripe: If he spent it on his office colleagues, then he should pay it back.
Experts say that couples should clearly keep aside some money for personal spending, money that does not affect the budget or running of the house. It’s also advised that if there are any debts that are hanging from either partner’s single days, it should be mutually decided whether one partner or both would repay that.
3. Saving versus spending: ‘Who decides?’
Again, when one person controlled the money, it was pretty much s/he who decided the spending/saving pattern too. With both partners earning, both want a say in how much is spent, where it’s spent and what and how it’s saved. Here if one partner is a spendthrift and the other too cautious, it could lead to friction.
Experts suggest conversation and clearly deciding on spending and saving budgets. If one partner decides money matters, it is advised that s/he should not get all dictatorial about it.
4. Balancing the scale: ‘He who earns more, pays more’
Distribution of housework and distribution of bill payment lead to the biggest fights. If who does how much work around the house - given that Metro Marriages have both partners working outside the home as well - is always a cause for debate, monetary contributions come a close second. He feels that she should pay some of the EMIs as well while she insists that since she earns lesser, she would only pay for small-ticket household items.
Experts suggest sitting down together or with a chartered accountant to chalk out what all has to be paid on a monthly basis and then either starting a joint Household Expenses record. Given the disparities in earning, couples could either decide to put in equal amounts or whatever either is comfortable with. This decision should be a mutual one.
5. It’s a question of trust: ‘Your money is pocket money, my money is saving?’
While the role of the woman vis-à-vis earning money and managing the household is changing, the transition is not always a smooth one. Men have been handling home loans and mortgages for long. Today fights often erupt when only one partner contributes to the house/saving/investment while the other simply squanders.
Many men complain that the wives - despite earning a good amount - treat their own money as extra pocket money while the entire burden of the house still falls on the man. Experts say that both partners have to work at trusting each other where money matters are concerned. If one partner is a spendthrift and the other feels the brunt of it, sitting and discussing things are in order.
What young India wants from '08 Budget?
As Finance Minister P Chidambaram gets ready to present Budget 2008-09 on February 29, CNBC-TV18 gets you a sense of what young India really wants.
Faster and inclusive growth, that’s what young India and young CEOs wanted from the Finance Minister in the last Budget.
This year, the focus is on agricultural reforms, on strengthening infrastructure and R&D and widening the tax base.
Finance Minister P Chidambaram has said, “The year 2007-08, will mark the beginning of the 11th plan. The declared objective is faster and more inclusive growth. I can state with confidence that in the eve of the plan, the economy is in a stronger position then ever before, it therefore beholds us to set higher goals. The approach paper to the 11th plan states that the plan ‘will aim at putting the economy on a sustainable growth trajectory, with a growth rate of approximately 10%, by the end of its period.”
“The economy is set to grow as robustly, as it will, it’ll take a heavy toll on the environment in both, the way goods are created and goods are used. I hope that in this budget or in the subsequent one, the finance minister will bring in this aspect as to how we protect our environment as we grow, because ultimately it’s supposed to be about quality of life,” Rajiv Bajaj, MD, Bajaj Auto, said.
Making his wish list Rajiv Memani, Country Managing Partner, E&Y India, said, “Reducing the custom duty would be the biggest step and that’s what he will try and target through the Budget.”
Anuj Gupta, CEO, Final Quadrant Solutions, is of the view, “Some system of access to information, that’s been the key success factor to the developed parts of the world. People are spreading on more information than we are and I think that’s some thing that the government should look at.”
Vivek Agarwal, CEO, Liqvid, said, “There is an example that I read, Bhutan for improving the public system of education, made it compulsory for all bureaucrats and ministers to send their children to the government schools where they were actually being run.”
ID Musafir, Director, M & B Footwear, believes, “The divide between the haves and the have-nots is going to increase, so unless you provide basic employment to the masses of India, and learn from examples like China, where everything co-exists, I think this is what the Finance Minister should look at.”
Farzana Haque, Head- Retail & CPG Group, TCS, said, “We are looking at India as a manufacturing hub for small cars, we are looking at semi-conductors, so there are some industries that need their incentive.”
From a population of 1.2 billion in India, only 35% have access to healthcare, in fact the government has made health care one of its top priorities.
With the beginning of the 11th five-year plan, the budget allocation for health and family welfare has been increased by 21.9% to Rs 15,291 crore, but this is just still 0.9% of the GDP, the focus of the government has been on providing primary rural health care through national rural healthcare missions.
But as the middle class in India grows, an increasing number of people are turning to private healthcare providers.
The number one demand of private healthcare players is that the government recognize their contribution without treating them as charities. To get a sense of the prescription to growth, we met one of the prominent names in the Indian healthcare market.
Shivender Mohan Singh, CEO and MD, Fortis Healthcare, who said, “From this year’s budget, I expect the team to put health of the nation to the wealth of the nation and give healthcare, the much required infrastructure status.”
Fortis Healthcare, a Ranbaxy group company, was incorporated in the year 1996. It has 13 hospitals across six states in North India, including cardiac and cancer specialty centers.
Leading the company forward is Shivender Mohan Singh, CEO and MD. He is now looking forward to growing Fortis’s network.
“The focus is going at west and south and also over the next two years, we will be looking at it rationally, though that’s not the major focus, that would be more opportunistic and more strategic. But the strategy of the company going forward in the next 3-4 years is to set up facilities on a national level, so we are looking at expanding our north India footprint, to replicate that in the west and the south and after that, in the east,” he said.
Fortis, now in its 7th year has created super specialty centers across the country. Starting with cardiac care centers, today Fortis Hospitals are multi-specialty facilities that use state of the art technology. But even with the ever-growing number of private health centers around the country, it hasn’t been given an industry status as demanded, so what is the biggest drawback?
“What the government has to do is to stop looking at private healthcare organizations to solve their problems. There was a lot of expectation and talks in the last 4-5 years that whatever the government has not been able to do for access to healthcare, it’s now become the private player’s responsibility or an expectation that the private players will do that. If you expect private hospitals to start giving treatments for free to a percentage of population or a certain level of population, that’s not going to happen because private players are not here to do charity or to government’s job, but we can certainly work together, Singh said.
“There is a lot of scope for the partnership where whatever agenda the government has, they can channel private players to work together and certainly capacity building is not difficult for a private organization to do as long as they see some benefits in that. So there is a lot of scope to work together but I think the approach has to be more collaborative.”
The health care sector for the coming budget hopes that annual poll for incentivising research and annual development will be heard. The sector is also hoping for tax benefits in order to enhance health care service delivery. So how could all of this be achieved?
“Health care is fundamental, the social sectors like health and education are the foundations of any developing country. We don’t have any such incentive in the industry, so I think infrastructure status study comes out as number one, second is that the time now for the health care industries to be give NA status. We have been running as a healthcare sector for long enough and it is required to give it a focus as an industry and therefore give healthcare an industry status,” he added.
“The third and final one to my mind is something we have talked a lot about, but very little has come out of that, is actually giving a separate license for health insurance and promoting players to get into health insurance and therefore have a third party player model for patients to get insured and get covered. Today 80% of health care in India is out of pocket which is pretty significant in terms for an cost for an individual at an episode if something is going to happen to a member of his family, but if there is an insurance, obviously the bite is going to be taken away and therefore the sting is not there for payment at that point of time, the procedure gets to be done or an operation needs to be done. “
“It also will overtime, start promoting preventive health care which for our country of our size and for the healthcare environment that we have, preventive will be the significant focus going forward, so health insurance would be the third and the last one for an incentive for the sector to grow,” Singh said.
Faster and inclusive growth, that’s what young India and young CEOs wanted from the Finance Minister in the last Budget.
This year, the focus is on agricultural reforms, on strengthening infrastructure and R&D and widening the tax base.
Finance Minister P Chidambaram has said, “The year 2007-08, will mark the beginning of the 11th plan. The declared objective is faster and more inclusive growth. I can state with confidence that in the eve of the plan, the economy is in a stronger position then ever before, it therefore beholds us to set higher goals. The approach paper to the 11th plan states that the plan ‘will aim at putting the economy on a sustainable growth trajectory, with a growth rate of approximately 10%, by the end of its period.”
“The economy is set to grow as robustly, as it will, it’ll take a heavy toll on the environment in both, the way goods are created and goods are used. I hope that in this budget or in the subsequent one, the finance minister will bring in this aspect as to how we protect our environment as we grow, because ultimately it’s supposed to be about quality of life,” Rajiv Bajaj, MD, Bajaj Auto, said.
Making his wish list Rajiv Memani, Country Managing Partner, E&Y India, said, “Reducing the custom duty would be the biggest step and that’s what he will try and target through the Budget.”
Anuj Gupta, CEO, Final Quadrant Solutions, is of the view, “Some system of access to information, that’s been the key success factor to the developed parts of the world. People are spreading on more information than we are and I think that’s some thing that the government should look at.”
Vivek Agarwal, CEO, Liqvid, said, “There is an example that I read, Bhutan for improving the public system of education, made it compulsory for all bureaucrats and ministers to send their children to the government schools where they were actually being run.”
ID Musafir, Director, M & B Footwear, believes, “The divide between the haves and the have-nots is going to increase, so unless you provide basic employment to the masses of India, and learn from examples like China, where everything co-exists, I think this is what the Finance Minister should look at.”
Farzana Haque, Head- Retail & CPG Group, TCS, said, “We are looking at India as a manufacturing hub for small cars, we are looking at semi-conductors, so there are some industries that need their incentive.”
From a population of 1.2 billion in India, only 35% have access to healthcare, in fact the government has made health care one of its top priorities.
With the beginning of the 11th five-year plan, the budget allocation for health and family welfare has been increased by 21.9% to Rs 15,291 crore, but this is just still 0.9% of the GDP, the focus of the government has been on providing primary rural health care through national rural healthcare missions.
But as the middle class in India grows, an increasing number of people are turning to private healthcare providers.
The number one demand of private healthcare players is that the government recognize their contribution without treating them as charities. To get a sense of the prescription to growth, we met one of the prominent names in the Indian healthcare market.
Shivender Mohan Singh, CEO and MD, Fortis Healthcare, who said, “From this year’s budget, I expect the team to put health of the nation to the wealth of the nation and give healthcare, the much required infrastructure status.”
Fortis Healthcare, a Ranbaxy group company, was incorporated in the year 1996. It has 13 hospitals across six states in North India, including cardiac and cancer specialty centers.
Leading the company forward is Shivender Mohan Singh, CEO and MD. He is now looking forward to growing Fortis’s network.
“The focus is going at west and south and also over the next two years, we will be looking at it rationally, though that’s not the major focus, that would be more opportunistic and more strategic. But the strategy of the company going forward in the next 3-4 years is to set up facilities on a national level, so we are looking at expanding our north India footprint, to replicate that in the west and the south and after that, in the east,” he said.
Fortis, now in its 7th year has created super specialty centers across the country. Starting with cardiac care centers, today Fortis Hospitals are multi-specialty facilities that use state of the art technology. But even with the ever-growing number of private health centers around the country, it hasn’t been given an industry status as demanded, so what is the biggest drawback?
“What the government has to do is to stop looking at private healthcare organizations to solve their problems. There was a lot of expectation and talks in the last 4-5 years that whatever the government has not been able to do for access to healthcare, it’s now become the private player’s responsibility or an expectation that the private players will do that. If you expect private hospitals to start giving treatments for free to a percentage of population or a certain level of population, that’s not going to happen because private players are not here to do charity or to government’s job, but we can certainly work together, Singh said.
“There is a lot of scope for the partnership where whatever agenda the government has, they can channel private players to work together and certainly capacity building is not difficult for a private organization to do as long as they see some benefits in that. So there is a lot of scope to work together but I think the approach has to be more collaborative.”
The health care sector for the coming budget hopes that annual poll for incentivising research and annual development will be heard. The sector is also hoping for tax benefits in order to enhance health care service delivery. So how could all of this be achieved?
“Health care is fundamental, the social sectors like health and education are the foundations of any developing country. We don’t have any such incentive in the industry, so I think infrastructure status study comes out as number one, second is that the time now for the health care industries to be give NA status. We have been running as a healthcare sector for long enough and it is required to give it a focus as an industry and therefore give healthcare an industry status,” he added.
“The third and final one to my mind is something we have talked a lot about, but very little has come out of that, is actually giving a separate license for health insurance and promoting players to get into health insurance and therefore have a third party player model for patients to get insured and get covered. Today 80% of health care in India is out of pocket which is pretty significant in terms for an cost for an individual at an episode if something is going to happen to a member of his family, but if there is an insurance, obviously the bite is going to be taken away and therefore the sting is not there for payment at that point of time, the procedure gets to be done or an operation needs to be done. “
“It also will overtime, start promoting preventive health care which for our country of our size and for the healthcare environment that we have, preventive will be the significant focus going forward, so health insurance would be the third and the last one for an incentive for the sector to grow,” Singh said.
How banks make you poorer
There's no such thing as a free lunch. Banks today offer a slew of services to the customer, which only seem to increase the amount that they charge you by the day.
Let’s take stock of what you pay to avail of services for a typical savings bank account.
1. Non-maintenance of minimum balance
You must maintain a stipulated minimum balance in your account (Rs 1,000 for a nationalised bank, Rs 5000 for a private bank).
If you fail to maintain this average quarterly minimum balance, you attract a bank charge of Rs 750-1500 respectively.
You could also face fines for cash transactions at branches and ATMs.
2. Chequebook charges
Most nationalised banks provide chequebooks free as per your requirement.
Many private ones, on the other hand, charge you Rs 50-200 per chequebook, if you use up more than 2-3 per quarter.
3. Account closure charges
Some banks charge Rs 50-200 if the account is closed before six months elapse.
4. Charges for certificates
Unlike most nationalised banks, private banks charge Rs 50-250 for documents like balance certificate, interest certificate, address confirmation, signature attestation, photo attestation etc.
5. Cheque return charges
Nationalised banks fine you Rs 50-200 in case of cheque return (due to insufficient funds, signature mismatch etc), but private ones charge you Rs 100-Rs 500.
6. Cash transaction at other branches
In case of a cash transaction at a branch other than where your account is opened, 1-3 transactions are free per quarter. Beyond that, be prepared to be charged at the rate of Rs 5 per for every Rs 1000 transacted.
7. ATM charges
If you use the ATM of another bank for balance enquiry or cash, you could be charged anything from Rs 10-100 per transaction.
8. Account statement
RBI directs that all banks must send free quarterly statements to their customers. Should you require more statements (in case of loss etc), you may have to pay Rs 50-500 per statement.
9. ATM or Debit Card fees
Most banks offer ATM cards free of cost, but some do charge their customers for debit cards. For example, ICICI Bank provides a combo ATM/ Debit card, for which it charges Rs 99 per annum.
Over and above these, there are several other charges, like outstation clearing charge (Rs 50- 500), pay order/ demand draft charge (based on amount), standing instruction charges, home cash delivery charges, old records retrieval charges, activation of dormant account charge etc.
Note: Visit the bank's web site or any of the branches, for a copy of these expenses. It is mandatory for every bank to give it to you.
Let’s take stock of what you pay to avail of services for a typical savings bank account.
1. Non-maintenance of minimum balance
You must maintain a stipulated minimum balance in your account (Rs 1,000 for a nationalised bank, Rs 5000 for a private bank).
If you fail to maintain this average quarterly minimum balance, you attract a bank charge of Rs 750-1500 respectively.
You could also face fines for cash transactions at branches and ATMs.
2. Chequebook charges
Most nationalised banks provide chequebooks free as per your requirement.
Many private ones, on the other hand, charge you Rs 50-200 per chequebook, if you use up more than 2-3 per quarter.
3. Account closure charges
Some banks charge Rs 50-200 if the account is closed before six months elapse.
4. Charges for certificates
Unlike most nationalised banks, private banks charge Rs 50-250 for documents like balance certificate, interest certificate, address confirmation, signature attestation, photo attestation etc.
5. Cheque return charges
Nationalised banks fine you Rs 50-200 in case of cheque return (due to insufficient funds, signature mismatch etc), but private ones charge you Rs 100-Rs 500.
6. Cash transaction at other branches
In case of a cash transaction at a branch other than where your account is opened, 1-3 transactions are free per quarter. Beyond that, be prepared to be charged at the rate of Rs 5 per for every Rs 1000 transacted.
7. ATM charges
If you use the ATM of another bank for balance enquiry or cash, you could be charged anything from Rs 10-100 per transaction.
8. Account statement
RBI directs that all banks must send free quarterly statements to their customers. Should you require more statements (in case of loss etc), you may have to pay Rs 50-500 per statement.
9. ATM or Debit Card fees
Most banks offer ATM cards free of cost, but some do charge their customers for debit cards. For example, ICICI Bank provides a combo ATM/ Debit card, for which it charges Rs 99 per annum.
Over and above these, there are several other charges, like outstation clearing charge (Rs 50- 500), pay order/ demand draft charge (based on amount), standing instruction charges, home cash delivery charges, old records retrieval charges, activation of dormant account charge etc.
Note: Visit the bank's web site or any of the branches, for a copy of these expenses. It is mandatory for every bank to give it to you.
Early pocket money leads to spoiled kids
Virtually all parents think that American children today are spoiled -- and over half of them admit that they are largely to blame, according to a survey.
A poll conducted by family magazine Cookie and AOL Money & Finance found that 94 percent of parents felt American children as a whole are spoiled -- and most of these, 55 per cent, think their own kids are contributing to the situation.
But although parents realize their children are spoiled, this has not curbed them from giving youngsters pocket money, some starting to hand out an allowance from the age of three.
The survey found that nearly one in five parents give their children a weekly cash allowance without any discernible responsibility attached, such as regular chores.
About 13 percent of children earn $ 15 a week or more although parents were split on what age to start giving an allowance.
Just over four in 10, or 41 per cent, gave it between the ages of six and eight, 28 per cent between the ages of nine and 11, and 18 per cent at age 12 or older.
But 13 per cent started giving children a regular allowance between the ages of three and five.
As well as pocket money, nearly four out of every 10 respondents in the online survey of 1,500 people said they reward a huge accomplishment, like getting straight As at school, with money.
Only four per cent insist that a portion of the child's allowance go to charity.
"With parents having children later in life, there is more disposable income floating around," Pilar Guzman, editor-in-chief of Cookie, said in a statement.
"It is our responsibility as parents to teach our children the value of a dollar, as well as the importance of giving to those less fortunate. Instilling these values in our homes and taking small steps around the holidays are the perfect ways to reinforce the importance of this message."
(Reporting by Belinda Goldsmith; Editing by Patricia Reaney)
A poll conducted by family magazine Cookie and AOL Money & Finance found that 94 percent of parents felt American children as a whole are spoiled -- and most of these, 55 per cent, think their own kids are contributing to the situation.
But although parents realize their children are spoiled, this has not curbed them from giving youngsters pocket money, some starting to hand out an allowance from the age of three.
The survey found that nearly one in five parents give their children a weekly cash allowance without any discernible responsibility attached, such as regular chores.
About 13 percent of children earn $ 15 a week or more although parents were split on what age to start giving an allowance.
Just over four in 10, or 41 per cent, gave it between the ages of six and eight, 28 per cent between the ages of nine and 11, and 18 per cent at age 12 or older.
But 13 per cent started giving children a regular allowance between the ages of three and five.
As well as pocket money, nearly four out of every 10 respondents in the online survey of 1,500 people said they reward a huge accomplishment, like getting straight As at school, with money.
Only four per cent insist that a portion of the child's allowance go to charity.
"With parents having children later in life, there is more disposable income floating around," Pilar Guzman, editor-in-chief of Cookie, said in a statement.
"It is our responsibility as parents to teach our children the value of a dollar, as well as the importance of giving to those less fortunate. Instilling these values in our homes and taking small steps around the holidays are the perfect ways to reinforce the importance of this message."
(Reporting by Belinda Goldsmith; Editing by Patricia Reaney)
Budget FAQs
What is the Union Budget?
The Union Budget is the annual report of India as a country. It contains the government of India's revenue and expenditure for the end of a particular fiscal year, which runs from April 1 to March 31. The Union Budget is the most extensive account of the government's finances, in which revenues from all sources and expenses of all activities undertaken are aggregated. It comprises the revenue budget and the capital budget. It also contains estimates for the next fiscal year.
What is a revenue budget?
The revenue budget consists of revenue receipts of the government (revenues from tax and other sources), and its expenditure.
Revenue receipts are divided into tax and non-tax revenue. Tax revenues are made up of taxes such as income tax, corporate tax, excise, customs and other duties that the government levies.
In non-tax revenue, the government's sources are interest on loans and dividend on investments like PSUs, fees, and other receipts for services that it renders. Revenue expenditure is the payment incurred for the normal day-to-day running of government departments and various services that it offers to its citizens.
The government also has other expenditure like servicing interest on its borrowings, subsidies, etc.
Usually, expenditure that does not result in the creation of assets, and grants given to state governments and other parties are revenue expenditures. The difference between revenue receipts and revenue expenditure is usually negative. This means that the government spends more than it earns. This difference is called the revenue deficit.
What is a capital budget?
The capital budget is different from the revenue budget as its components are of a long-term nature. The capital budget consists of capital receipts and payments.
Capital receipts are government loans raised from the public, government borrowings from the Reserve Bank and treasury bills, loans received from foreign bodies and governments, divestment of equity holding in public sector enterprises, securities against small savings, state provident funds, and special deposits.
Capital payments are capital expenditure on acquisition of assets like land, buildings, machinery, and equipment. Investments in shares, loans and advances granted by the central government to state and union territory governments, government companies, corporations and other parties.
What are direct taxes?
These are the taxes that are levied on the income of individuals or organisations. Income tax, corporate tax, inheritance tax are some instances of direct taxation.
Income tax is the tax levied on individual income from various sources like salaries, investments, interest etc.
Corporate tax is the tax paid by companies or firms on the incomes they earn.
What are indirect taxes?
Indirect taxes are those paid by consumers when they buy goods and services. These include excise and customs duties.
Customs duty is the charge levied when goods are imported into the country, and is paid by the importer or exporter.
Excise duty is a levy paid by the manufacturer on items manufactured within the country. Usually, these charges are passed on to the consumer.
What is plan and non-plan expenditure?
There are two components of expenditure - plan and non-plan.
Of these, plan expenditures are estimated after discussions between each of the ministries concerned and the Planning Commission.
Non-plan revenue expenditure is accounted for by interest payments, subsidies (mainly on food and fertilisers), wage and salary payments to government employees, grants to States and Union Territories governments, pensions, police, economic services in various sectors, other general services such as tax collection, social services, and grants to foreign governments.
Non-plan capital expenditure mainly includes defence, loans to public enterprises, loans to States, Union Territories and foreign governments.
What is the Central Plan Outlay?
It is the division of monetary resources among the different sectors in the economy and the ministries of the government.
What is fiscal policy?
Fiscal policy is a change in government spending or taxing designed to influence economic activity. These changes are designed to control the level of aggregate demand in the economy. Governments usually bring about changes in taxation, volume of spending, and size of the budget deficit or surplus to affect public expenditure.
What is a fiscal deficit?
This is the gap between the government's total spending and the sum of its revenue receipts and non-debt capital receipts. It represents the total amount of borrowed funds required by the government to completely meet its expenditure.
What is the Finance Bill?
The government proposals for the levy of new taxes, alterations in the present tax structure or continuance of the current tax structure beyond the period approved by Parliament, are laid down before Parliament in this bill.
The Parliament approves the Finance Bill for a period of one year at a time, which becomes the Finance Act.
What impact does the Budget have on the market and economy?
The Budget impacts the economy, the interest rate and the stock markets. How the finance minister spends and invests money affects the fiscal deficit. The extent of the deficit and the means of financing it influence the money supply and the interest rate in the economy. High interest rates mean higher cost of capital for the industry, lower profits and hence lower stock prices.
The fiscal measures undertaken by the government affect public expenditure. For instance, an increase in direct taxes would decrease disposable income, thus reducing demand for goods. This decrease in demand will translate into a decrease in production, therefore affecting economic growth.
Similarly, an increase in indirect taxes would also decrease demand. This is because indirect taxes are often partially or completely passed on to consumers in the form of higher prices. Higher prices imply a reduction in demand and this in turn would reduce profit margins of companies, thus slowing down production and growth.
Non-plan expenditure like subsidies and defence also affect the economy as limited government resources are used for non-productive purposes.
The Union Budget is the annual report of India as a country. It contains the government of India's revenue and expenditure for the end of a particular fiscal year, which runs from April 1 to March 31. The Union Budget is the most extensive account of the government's finances, in which revenues from all sources and expenses of all activities undertaken are aggregated. It comprises the revenue budget and the capital budget. It also contains estimates for the next fiscal year.
What is a revenue budget?
The revenue budget consists of revenue receipts of the government (revenues from tax and other sources), and its expenditure.
Revenue receipts are divided into tax and non-tax revenue. Tax revenues are made up of taxes such as income tax, corporate tax, excise, customs and other duties that the government levies.
In non-tax revenue, the government's sources are interest on loans and dividend on investments like PSUs, fees, and other receipts for services that it renders. Revenue expenditure is the payment incurred for the normal day-to-day running of government departments and various services that it offers to its citizens.
The government also has other expenditure like servicing interest on its borrowings, subsidies, etc.
Usually, expenditure that does not result in the creation of assets, and grants given to state governments and other parties are revenue expenditures. The difference between revenue receipts and revenue expenditure is usually negative. This means that the government spends more than it earns. This difference is called the revenue deficit.
What is a capital budget?
The capital budget is different from the revenue budget as its components are of a long-term nature. The capital budget consists of capital receipts and payments.
Capital receipts are government loans raised from the public, government borrowings from the Reserve Bank and treasury bills, loans received from foreign bodies and governments, divestment of equity holding in public sector enterprises, securities against small savings, state provident funds, and special deposits.
Capital payments are capital expenditure on acquisition of assets like land, buildings, machinery, and equipment. Investments in shares, loans and advances granted by the central government to state and union territory governments, government companies, corporations and other parties.
What are direct taxes?
These are the taxes that are levied on the income of individuals or organisations. Income tax, corporate tax, inheritance tax are some instances of direct taxation.
Income tax is the tax levied on individual income from various sources like salaries, investments, interest etc.
Corporate tax is the tax paid by companies or firms on the incomes they earn.
What are indirect taxes?
Indirect taxes are those paid by consumers when they buy goods and services. These include excise and customs duties.
Customs duty is the charge levied when goods are imported into the country, and is paid by the importer or exporter.
Excise duty is a levy paid by the manufacturer on items manufactured within the country. Usually, these charges are passed on to the consumer.
What is plan and non-plan expenditure?
There are two components of expenditure - plan and non-plan.
Of these, plan expenditures are estimated after discussions between each of the ministries concerned and the Planning Commission.
Non-plan revenue expenditure is accounted for by interest payments, subsidies (mainly on food and fertilisers), wage and salary payments to government employees, grants to States and Union Territories governments, pensions, police, economic services in various sectors, other general services such as tax collection, social services, and grants to foreign governments.
Non-plan capital expenditure mainly includes defence, loans to public enterprises, loans to States, Union Territories and foreign governments.
What is the Central Plan Outlay?
It is the division of monetary resources among the different sectors in the economy and the ministries of the government.
What is fiscal policy?
Fiscal policy is a change in government spending or taxing designed to influence economic activity. These changes are designed to control the level of aggregate demand in the economy. Governments usually bring about changes in taxation, volume of spending, and size of the budget deficit or surplus to affect public expenditure.
What is a fiscal deficit?
This is the gap between the government's total spending and the sum of its revenue receipts and non-debt capital receipts. It represents the total amount of borrowed funds required by the government to completely meet its expenditure.
What is the Finance Bill?
The government proposals for the levy of new taxes, alterations in the present tax structure or continuance of the current tax structure beyond the period approved by Parliament, are laid down before Parliament in this bill.
The Parliament approves the Finance Bill for a period of one year at a time, which becomes the Finance Act.
What impact does the Budget have on the market and economy?
The Budget impacts the economy, the interest rate and the stock markets. How the finance minister spends and invests money affects the fiscal deficit. The extent of the deficit and the means of financing it influence the money supply and the interest rate in the economy. High interest rates mean higher cost of capital for the industry, lower profits and hence lower stock prices.
The fiscal measures undertaken by the government affect public expenditure. For instance, an increase in direct taxes would decrease disposable income, thus reducing demand for goods. This decrease in demand will translate into a decrease in production, therefore affecting economic growth.
Similarly, an increase in indirect taxes would also decrease demand. This is because indirect taxes are often partially or completely passed on to consumers in the form of higher prices. Higher prices imply a reduction in demand and this in turn would reduce profit margins of companies, thus slowing down production and growth.
Non-plan expenditure like subsidies and defence also affect the economy as limited government resources are used for non-productive purposes.
PRE BUDGET Details
Ad-valorem duties: This Latin term refers to duties or taxes that are imposed on commodities based on their value.
Budgetary Deficit: When expenses exceed revenues, it leads to a situation of budgetary deficit. The entire budgetary exercise falls short of allocating enough funds to a certain area.
Budget Estimates: These estimates contain an annual estimate of Fiscal Deficit and Revenue Deficit and include the estimates of the Centre's spending during the financial year. It also contains the income received as proceeds of tax revenues.
Balance of Payment: The annual overall statement of a country's economic transactions – spending and income – with the rest of the world.
Bank Credit: This refers to the borrowing capacity advanced by a bank to an individual, firm or organization in the form of loans, cash credit and overdrafts.
Bank Rate: This is the interest rate at which the Reserve Bank of India advances short-term loans to commercial banks in the country. Changes in bank rate are reflected in the prime lending rates (PLRs) offered by commercial banks to their best customers.
Borrowings: When commercial banks receive something of value from the RBI against refinance schemes, like general refinance, and export credit refinance.
Cash Balances: Cash Balances with RBI indicate those maintained by scheduled banks with RBI and include these balances under cash reserve ratio (CRR) requirements.
Capital Budget: This plan keeps track of the Centre’s capital receipts and payments and accounts for market loans, borrowings from the Reserve Bank and other institutions through the sale of Treasury Bills, loans from foreign governments and recoveries of loans granted by the Central government to state governments and Union Territories.
Capital Payments: Refer to expenses incurred on acquisition of assets.
Cenvat: Central Value Added Tax (CENVAT) is a substitute for the earlier Modified Value Added Tax (MODVAT) scheme and is aimed at reducing the spiraling effect of indirect taxes on finished products.
Custom Duties: These taxes are imposed when goods are either imported or exported.
Countervailing Duties: Levied on imports that may lead to price rise in the domestic market. Seen as a means of discouraging unfair trade practices by other countries.
Consolidated Fund: This is a big reservoir where the Government pools all its funds including revenues, loans raised and recoveries of loans granted together.
Contingency Fund: As the name suggests, this is an emergency fund to help the Government tide over when in dire straits. The fund is at the disposal of the President and requires Parliament approval and the amount withdrawn from the fund is recouped.
Capital Expenditure: Capital expenditure (CAPEX) is the amount a company spends on buying fixed assets like land, building, machinery and equipment. Loans and advances sanctioned by the Centre to state governments, Union Territories and PSUs also fall in this category.
Capital Receipt: Loans raised by the Centre from the market, government borrowings from the RBI, sale of Treasury Bills and loans received from foreign governments all form a part of Capital Receipt. Other items in this category include recovery of loans granted by the Centre to states and UTs and proceeds from the dilution of the government's stake in PSUs.
Central Plan: Refers to the government's budgetary support to the Plan and the internal and extra budgetary resources raised by the PSUs.
Consumer price index: A price index covering the prices of consumer goods.
Corporate Tax: Tax levied on companies on the profit made by them.
Currency Liability: Comprises one, two and five-rupee coins and other small coinage, and commemorative coins issued by the government mints.
Current Account Transactions: A country's balance of payments on Current Account Transactions includes trade in goods or visibles; trade in services, or invisibles; payments of factor incomes, including dividends, interests, migrants remittances from earnings abroad; and international transfers, that is gifts.
Current Account Deficit: This is an excess of expenditure over receipts on current account in a country's balance of payments.
Current Account Surplus: This is an excess of receipts over expenditure on current account in a country's balance of payments.
Direct Taxes: Taxes which are imposed directly on consumers like Income Tax and Corporate Tax.
Disinvestment: The process of dilution of the government's stake in Public Sector Undertakings.
Demand for grants: A statement of estimate of expenditure from the Consolidated Fund and requires the approval of the Lok Sabha.
Demand deposits: Bank account that allows money to be withdrawn from the available balance by the account holder at his or her will and by any means, without notice to the bank.
Deposit money: Consists of demand deposits with commercial and cooperative banks and also includes current deposit portions of savings bank deposits. These deposits do not earn any interest.
Excise Duty: A tax levied on the consumption of particular goods and may be levied to raise government revenue. Excise duties are often levied at higher rates on goods like alcohol, tobacco and petrol whose consumption is believed to have adverse effects on public health, order and environment.
Foreign Direct Investment: The acquisition by residents of a country of real assets abroad and may be done by remitting money abroad to be spent on acquiring land, constructing buildings, mines, or machinery, or buying existing foreign business.
Finance Bill: This consists of the Government's proposals for the imposition of new taxes, modification of the existing tax structure or continuance of the existing tax structure beyond the period approved by Parliament.
Fiscal Deficit: It is the difference between the Revenue Receipts and Total Expenditure.
Gross Domestic Product (GDP): This is the value of a country’s overall output of goods and services during one fiscal year) at market prices, excluding net income from abroad. It thus includes activities carried out in the country by foreign-owned companies, and excludes activities of firms owned by residents but carried on abroad.
Gross National Product (GNP): This is the total market value of the finished goods and services manufactured within the country in a given financial year, plus income earned by the local residents from investments made abroad, minus the income earned by foreigners in the domestic market.
Gross Investment: Spending on creating new capital goods before making any allowance for capital consumption and consists of gross fixed investment, plus net investment in stocks and work in progress.
Income Tax: The tax levied on income made by individuals. Income tax is normally zero on some bands of small incomes, both on equity grounds and because of the expense of collecting tiny amounts of tax. It is normally proportional up to some upper limit; income beyond this is taxed at higher rates.
Inflation: A persistent tendency in the economy when prices and money wages are on the rise. Inflation is measured by the proportional changes over time in some appropriate index, commonly a consumer price index, or a GDP deflator.
Indirect Taxes: Imposed on goods manufactured, imported or exported such as Excise Duties and Custom Duties.
MODVAT: Modified Value Added Tax is a way of lending some relief to the final manufacturers of goods on excise duties borne by their suppliers.
Merchandise Account: The part of balance-of-payments accounts referring to visible trade or merchandise imports and exports.
Non-Plan Expenditure: This consists of Revenue and Capital Expenditure on interest payments, defence expenditure, subsidies, postal deficit, police, pensions, economic services, loans to public sector enterprises and loans as well as grants to state governments, UTs and foreign governments.
Peak Rate: It is the highest rate of custom duty applicable on an item.
Performance Budget: This is a compilation of programmes and activities of different ministries and departments.
Public Account: An account where money received through transactions not related to the consolidated fund is kept.
Plan Expenditure: This consists of both Revenue Expenditure and Capital Expenditure of the Centre on the Central Plan, central assistance to states and UTs.
Purchasing power parity (PPP): The rates of currency conversion which equalise the purchasing power of different currencies. This means that a given sum of money, when converted into different currencies at the PPP rates, will buy the same basket of goods and services in all countries.
Reserve money: A term which refers to money supplied by the RBI and the Centre. This indicates monetary liability of the RBI and the Government of India to the public, including banks. The reserve money, or currency notes and coins, is held by public and banks in their currency chests and as deposits with RBI. It also includes "other" deposits with RBI.
Revenue Deficit: The difference between Revenue Expenditure and Revenue Receipts.
Revenue Surplus: It is the excess of Revenue Receipts over Revenue Expenditure.
Revised Estimates: Usually tabled in the following Budget, it is the difference between the Budget Estimates and the actual figures.
Revenue Budget: Consists of Revenue Receipts and Revenue Expenditure of the government.
Revenue Receipt: Consists of duties imposed by the Centre, interest and dividend on investments made by the government.
Revenue Expenditure: Expenditure incurred for the normal functioning of the government departments and various other services such as interest charges on debt incurred by the government.
Subsidies: Financial aid provided by the Centre to individuals or a group of individuals to be competitive. The grant of subsidies is also aimed at improving their skills of those who benefit from the subsidies.
Term Deposits: Deposits with a fixed maturity of not less than 15 days, including cash certificates, and cumulative or recurring deposits but excluding the interest accrued and payable on these deposits.
Value Added Tax: Based on the difference between the value of the output over the value of the inputs used.
Wholesale Price Index: The prices of goods, which are dealt with wholesale, mainly bulk goods that are mostly inputs to production rather than finished commodities. A wholesale price index, for example, includes wheat and sheets of steel, whereas a retail price index includes bread and cars.
Budgetary Deficit: When expenses exceed revenues, it leads to a situation of budgetary deficit. The entire budgetary exercise falls short of allocating enough funds to a certain area.
Budget Estimates: These estimates contain an annual estimate of Fiscal Deficit and Revenue Deficit and include the estimates of the Centre's spending during the financial year. It also contains the income received as proceeds of tax revenues.
Balance of Payment: The annual overall statement of a country's economic transactions – spending and income – with the rest of the world.
Bank Credit: This refers to the borrowing capacity advanced by a bank to an individual, firm or organization in the form of loans, cash credit and overdrafts.
Bank Rate: This is the interest rate at which the Reserve Bank of India advances short-term loans to commercial banks in the country. Changes in bank rate are reflected in the prime lending rates (PLRs) offered by commercial banks to their best customers.
Borrowings: When commercial banks receive something of value from the RBI against refinance schemes, like general refinance, and export credit refinance.
Cash Balances: Cash Balances with RBI indicate those maintained by scheduled banks with RBI and include these balances under cash reserve ratio (CRR) requirements.
Capital Budget: This plan keeps track of the Centre’s capital receipts and payments and accounts for market loans, borrowings from the Reserve Bank and other institutions through the sale of Treasury Bills, loans from foreign governments and recoveries of loans granted by the Central government to state governments and Union Territories.
Capital Payments: Refer to expenses incurred on acquisition of assets.
Cenvat: Central Value Added Tax (CENVAT) is a substitute for the earlier Modified Value Added Tax (MODVAT) scheme and is aimed at reducing the spiraling effect of indirect taxes on finished products.
Custom Duties: These taxes are imposed when goods are either imported or exported.
Countervailing Duties: Levied on imports that may lead to price rise in the domestic market. Seen as a means of discouraging unfair trade practices by other countries.
Consolidated Fund: This is a big reservoir where the Government pools all its funds including revenues, loans raised and recoveries of loans granted together.
Contingency Fund: As the name suggests, this is an emergency fund to help the Government tide over when in dire straits. The fund is at the disposal of the President and requires Parliament approval and the amount withdrawn from the fund is recouped.
Capital Expenditure: Capital expenditure (CAPEX) is the amount a company spends on buying fixed assets like land, building, machinery and equipment. Loans and advances sanctioned by the Centre to state governments, Union Territories and PSUs also fall in this category.
Capital Receipt: Loans raised by the Centre from the market, government borrowings from the RBI, sale of Treasury Bills and loans received from foreign governments all form a part of Capital Receipt. Other items in this category include recovery of loans granted by the Centre to states and UTs and proceeds from the dilution of the government's stake in PSUs.
Central Plan: Refers to the government's budgetary support to the Plan and the internal and extra budgetary resources raised by the PSUs.
Consumer price index: A price index covering the prices of consumer goods.
Corporate Tax: Tax levied on companies on the profit made by them.
Currency Liability: Comprises one, two and five-rupee coins and other small coinage, and commemorative coins issued by the government mints.
Current Account Transactions: A country's balance of payments on Current Account Transactions includes trade in goods or visibles; trade in services, or invisibles; payments of factor incomes, including dividends, interests, migrants remittances from earnings abroad; and international transfers, that is gifts.
Current Account Deficit: This is an excess of expenditure over receipts on current account in a country's balance of payments.
Current Account Surplus: This is an excess of receipts over expenditure on current account in a country's balance of payments.
Direct Taxes: Taxes which are imposed directly on consumers like Income Tax and Corporate Tax.
Disinvestment: The process of dilution of the government's stake in Public Sector Undertakings.
Demand for grants: A statement of estimate of expenditure from the Consolidated Fund and requires the approval of the Lok Sabha.
Demand deposits: Bank account that allows money to be withdrawn from the available balance by the account holder at his or her will and by any means, without notice to the bank.
Deposit money: Consists of demand deposits with commercial and cooperative banks and also includes current deposit portions of savings bank deposits. These deposits do not earn any interest.
Excise Duty: A tax levied on the consumption of particular goods and may be levied to raise government revenue. Excise duties are often levied at higher rates on goods like alcohol, tobacco and petrol whose consumption is believed to have adverse effects on public health, order and environment.
Foreign Direct Investment: The acquisition by residents of a country of real assets abroad and may be done by remitting money abroad to be spent on acquiring land, constructing buildings, mines, or machinery, or buying existing foreign business.
Finance Bill: This consists of the Government's proposals for the imposition of new taxes, modification of the existing tax structure or continuance of the existing tax structure beyond the period approved by Parliament.
Fiscal Deficit: It is the difference between the Revenue Receipts and Total Expenditure.
Gross Domestic Product (GDP): This is the value of a country’s overall output of goods and services during one fiscal year) at market prices, excluding net income from abroad. It thus includes activities carried out in the country by foreign-owned companies, and excludes activities of firms owned by residents but carried on abroad.
Gross National Product (GNP): This is the total market value of the finished goods and services manufactured within the country in a given financial year, plus income earned by the local residents from investments made abroad, minus the income earned by foreigners in the domestic market.
Gross Investment: Spending on creating new capital goods before making any allowance for capital consumption and consists of gross fixed investment, plus net investment in stocks and work in progress.
Income Tax: The tax levied on income made by individuals. Income tax is normally zero on some bands of small incomes, both on equity grounds and because of the expense of collecting tiny amounts of tax. It is normally proportional up to some upper limit; income beyond this is taxed at higher rates.
Inflation: A persistent tendency in the economy when prices and money wages are on the rise. Inflation is measured by the proportional changes over time in some appropriate index, commonly a consumer price index, or a GDP deflator.
Indirect Taxes: Imposed on goods manufactured, imported or exported such as Excise Duties and Custom Duties.
MODVAT: Modified Value Added Tax is a way of lending some relief to the final manufacturers of goods on excise duties borne by their suppliers.
Merchandise Account: The part of balance-of-payments accounts referring to visible trade or merchandise imports and exports.
Non-Plan Expenditure: This consists of Revenue and Capital Expenditure on interest payments, defence expenditure, subsidies, postal deficit, police, pensions, economic services, loans to public sector enterprises and loans as well as grants to state governments, UTs and foreign governments.
Peak Rate: It is the highest rate of custom duty applicable on an item.
Performance Budget: This is a compilation of programmes and activities of different ministries and departments.
Public Account: An account where money received through transactions not related to the consolidated fund is kept.
Plan Expenditure: This consists of both Revenue Expenditure and Capital Expenditure of the Centre on the Central Plan, central assistance to states and UTs.
Purchasing power parity (PPP): The rates of currency conversion which equalise the purchasing power of different currencies. This means that a given sum of money, when converted into different currencies at the PPP rates, will buy the same basket of goods and services in all countries.
Reserve money: A term which refers to money supplied by the RBI and the Centre. This indicates monetary liability of the RBI and the Government of India to the public, including banks. The reserve money, or currency notes and coins, is held by public and banks in their currency chests and as deposits with RBI. It also includes "other" deposits with RBI.
Revenue Deficit: The difference between Revenue Expenditure and Revenue Receipts.
Revenue Surplus: It is the excess of Revenue Receipts over Revenue Expenditure.
Revised Estimates: Usually tabled in the following Budget, it is the difference between the Budget Estimates and the actual figures.
Revenue Budget: Consists of Revenue Receipts and Revenue Expenditure of the government.
Revenue Receipt: Consists of duties imposed by the Centre, interest and dividend on investments made by the government.
Revenue Expenditure: Expenditure incurred for the normal functioning of the government departments and various other services such as interest charges on debt incurred by the government.
Subsidies: Financial aid provided by the Centre to individuals or a group of individuals to be competitive. The grant of subsidies is also aimed at improving their skills of those who benefit from the subsidies.
Term Deposits: Deposits with a fixed maturity of not less than 15 days, including cash certificates, and cumulative or recurring deposits but excluding the interest accrued and payable on these deposits.
Value Added Tax: Based on the difference between the value of the output over the value of the inputs used.
Wholesale Price Index: The prices of goods, which are dealt with wholesale, mainly bulk goods that are mostly inputs to production rather than finished commodities. A wholesale price index, for example, includes wheat and sheets of steel, whereas a retail price index includes bread and cars.
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