Topic Details (Notes format)

Budget Process and Key Terminology

Subject: Economics

Book: Comprehensive Indian Economy

Every year, the Union Budget reveals the government’s revenue and expenditure estimates. The process includes preparation by the Ministry of Finance, parliamentary debates, and vote on demands. Key terms—like revenue deficit (difference between revenue expenditure and revenue receipts), fiscal deficit (total borrowings), and primary deficit (fiscal deficit minus interest payments)—often appear in exams. Understanding the distinction between plan vs. non-plan expenditure (older classification) or capital vs. revenue expenditure clarifies how funds are allocated. Focus also on FRBM targets and how budgetary announcements align with macroeconomic objectives such as growth and equity.

Practice Questions

Which of the following is an example of a capital receipt for the government?

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What is the term for goods that are used together, such as cars and fuel?

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What does the term “elasticity of demand” measure?

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Which of the following factors is NOT included in the calculation of Human Development Index (HDI)?

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What is meant by “structural unemployment”?

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What does the term “national income” refer to?

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What does the “Human Development Index” measure?

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What does “inclusive banking” mean?

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Which of the following is an example of fiscal policy?

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Which of the following is NOT an example of a direct tax?

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