Union Budget - Economic Numbers Special Edition

7/30/2019 Union Budget - Economic Numbers Special Edition

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Union BudgetAnnual Budget is one of the most anticipated economic and financial events of the y

The report presented by the Finance Minister includes Government of Indiaexpenditure for one fiscal year.

The Budget is the most comprehensive report of the Government`s finances, whrevenues received from all sources and expenditure incurred on all activities.

The Budget also includes forecasts for the next fiscal year called budgeted estimates


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Budgetary Process

The Budget process has been explained below:

Every year, BUDGETDIVISION under the Ministry of Finance is responsible for the prepa

budget. All government ministries & departments send in their funds proposals and requ

Based on the inputs, a DRAFT BUDGET is prepared.

The draft budget is to be approved by Finance Minister in consultation with the Prime Min

A FINAL BUDGET is presented in the Parliament.

A DISCUSSION ON THE BUDGET is held in the Parliament (regarding each ministrysand Finance Minister responds to questions. Revision of tax (direct & indirect) prodiscussed & voted upon here.

Once the grants are approved, 2 bills are introduced in the Lok Sabha APPROPRIAapproval of funds to be given to each ministry) and FINANCE BILL (tax proposals). Uapproved.

Source : investmentyogi.com


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COMPONENTSOF GOVERNMENT BUDGET

GOVERNMENTBUDGET

REVENUE

BUDGET

REVENUE

RECEIPTS

TAX REVENUE

NON TAX

REVENUEREVENUE

EXPENDITURE

CAPITAL

BUDGET

CAPITAL

RECEIPTS

CAPITAL

EXPENDITURE


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REVENUE BUDGET

REVENUE RECEIPTS are divided into tax andnon-tax revenue.

TAX REVENUES aremade up of taxes such asincome tax, corporatetax, excise, customs andother duties which thegovernment levies.

NON-TAX REVENUESconsist of interest anddividend on investmentsmade by government,fees and other receiptsfor services rendered byGovernment.

REVENUE EXPENDITURE iincurred for the normal day-togovernment departments and variit offers to its citizens.

The government also hasother expenditure likeservicing interest on itsborrowings, subsidies,etc.

Usually,does ncreationgrants governmparties expendi

The revenue budgetconsists of revenue receipts of the government (revenues fromsources) and the expenditure met from these revenues.

The difference between revenue receipts and revenue expenditure is called the rewhich is usually negative.

Source : Moneycontrol.com


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CAPITAL BUDGET

The capital budget consists of capital receipts and payments

CAPITAL RECEIPTS

Capital receipts are government loans

raised from the public, governmentborrowings from the Reserve Bank andtreasury bills, loans received from foreignbodies and governments, divestment ofequity holding in public sector enterprises,securities against small savings, stateprovident funds, and special deposits.

CAPITAL EXPENDITURE

Capital payments are capital expend

acquisition of assets like land, bmachinery, and equipment. Investmshares, loans and advances grantedcentral government to state andterritory governments, govcompanies, corporations and other p



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Receipts & Expenditure of Central Govern(As per cent of GDP)

P: Provisional Actuals , BE : Budget Estimates Data

10.9

9.6

8.9 1

0.4

8.9

8.8

7.9

7.1

7.5

2.1

1.7

1.8

2.9

11.9 1

4.1

14.1

13.5

1.4

2.2

2.1

1.7

1.1

1.3

1.4

1.2

3.4

6.1

7

5.3

2.4

1.6

1.7

2.1

2007-08 2008-09 2009-10 2010-11 (P) 2

ASPER

CENT

OFGDP

YEAR

Revenue receipts Tax revenue Non-tax revenue

Revenue expenditure Subsidies Defence expenditu

Capital receipts Capital expenditure


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Receipts & Expenditure of Central Govern

P: Provisional Actuals , BE : Budget Estimates Dat

(Rs 000 Crore) 2007-08 2008-09 2009-10 2010-11 (BE) 2010-11 (

1. Revenue receipts (a+b) 542 540 573 682 7

(a) Tax revenue (net of States share) 440 443 457 534 5

(b) Non-tax revenue 102 97 116 148 2

2. Revenue expenditure 594 794 912 959 10

(a) Interest payments 171 192 213 249 2

(b) Major subsidies 67 124 136 109 1

(c)Defence expenditure 54 73 91 87

3. Revenue deficit (2-1) 53 254 339 277 2

4. Capital receipts 171 344 452 427 4

(a) Recovery of loans 5 6 9 5

(b) Other receipt (mainly PSUdisinvestment) 39 1 25 40

(c) Borrowings and other liabilities 127 337 418 381 3

5. Capital expenditure 118 90 113 150 1

6. Total expenditure [2+5=6(a)+6(b)] 713 884 1024 1109 11

(a) Plan expenditure 205 275 303 373 3

(b) Non-plan expenditure 508 609 721 736 8

7. Fiscal deficit [6-1-4(a)-4(b)] 127 337 418 381 3

8. Primary deficit [7-2(a)] -44 145 205 133 1


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Trends in Deficits of Central Governm

P: Provisional Actuals , BE : Budget Estimates Data so

1.1

4.55.2

3.2

2.5

66.5

4.8

-0.9

2.63.2

1.8

2007-08 2008-09 2009-10 2010-11(P) 201

As

percentofGDP

Year

Revenue Deficit Fiscal Deficit Primary Deficit


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Sources of Tax Revenue

(Rs. '000 Crore) 2007-08 2008-09 2009-10 2010-11 (BE) 2010-11 (

Direct 296 320 368 423 439 Personal income tax 103 106 122 121 139

Corporation tax 193 213 245 301 299

Indirect 279 269 245 315 346

Customs 104 100 83 115 136

Excise 124 109 103 132 138

Service tax 51 61 58 68 71

Gross tax revenue 593 605 625 747 795

P: Provisional Actuals , BE : Budget Estimates


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Source : RBI

Movements in Key Policy Variables

May 032011

Jun 162011

Jul 262011

Sep 162011

Oct 252011

Jan 282012

Feb 132012

Mar 102012

Apr 172012

Jun 182012

Aug 112012

Sep 22012

Reverse Repo Rate 6.25 6.5 7 7.25 7.5 7.5 7.5 7.5 7 7 7 7

Repo Rate 7.25 7.5 8 8.25 8.5 8.5 8.5 8.5 8 8 8 8Cash Reserve Ratio 6 6 6 6 6 5.5 5.5 4.75 4.75 4.75 4.75 4.5

Statutory Liquidity Ratio 24 24 24 24 24 24 24 24 24 24 23 23

0

5

10

15

20

25

PerCent

Effective Since


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TRENDS IN GOVERNMENT SUBSID2009 2010 2011 2012RE 2013BE

Subsidies (' 000 Cr) 130 141 173 216 190

% yoy 82.9 9 22.7 24.7 -12.2

% to GDP 2.3 2.2 2.2 2.4 1.9

Major Subsidies

Food ('000 Cr) 44 58 64 73 75

% yoy 39.7 33.6 9.2 14.1 3

% of total subsidy 33.7 41.3 36.8 33.7 39.5

Fertilizer ('000 Cr) 77 61 62 67 61% yoy 135.8 -20 1.7 7.9 -9.3

% of total subsidy 59.1 43.3 35.9 31.1 32.1

Petroleum ('000 Cr) 3 15 38 68 44

% yoy 1.1 424.2 156.6 78.5 -36.4

% of total subsidy 2.2 10.6 22.1 31.7 22.9

RE : Revised Estimate, BE : Budget Estimate Source: Angel Research, Budget Documents


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Gdp Growth Rates

9.3

6.78.4

8.37

6.535.8

0.11

7

2.8

9.7

4.4

8.4

7.2

3.4

10.3 10 10.5

9.38.9

0

2

4

6

8

10

12

2007-08 2008-09 2009-10 2010-11 2011-12

P

ER

CENT

YEAR

Real GDP Agriculture Industry Services

Source: Planning Commission, Govt. of India


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Year

Agriculture &allied activities

Agriculture IndustryMining &

QuarryingManufactu

ConstantPrices

CurrentPrices

ConstantPrices

CurrentPrices

ConstantPrices

CurrentPrices

ConstantPrices

CurrentPrices

ConstantPrices

CuPr

2006-07 6192 7230 5237 6047 7364 8178 926 1068 5705 6

2007-08 6551 8365 5570 7163 8045 9414 960 1248 6291 7

2008-09 6557 9432 5554 8066 8374 10492 981 1398 6563 8

2009-10 6625 10794 5594 9246 9122 11770 1042 1574 7197 9

2010-11 7091 12699 6029 10938 9745 13556 1094 1912 7742 10

2011-12 7287 14174 - - 10000 15034 1085 2239 7935 11

Components of Gdp

Source: RBI


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Year

Services(Including

Construction)

ConstructionTrade, Hotel,

Transport and

Communications

Finance,Insurance, Real

Estate & BusinessServices

CommunSocial

PersonService

ConstantPrices

CurrentPrices

ConstantPrices

CurrentPrices

ConstantPrices

CurrentPrices

ConstantPrices

CurrentPrices

ConstantPrices

CP

2006-07 22088 24125 2848 3224 9101 9984 5611 5866 4528

2007-08 24371 28042 3155 3889 10095 11500 6281 6915 4839

2008-09 26656 33111 3323 4510 10851 13108 7036 8454 5445

2009-10 29329 38352 3557 5022 11972 14855 7699 9622 6101

2010-11 32023 45319 3842 5853 13305 17555 8500 11705 6377

2011-12 34738 53119 4046 6707 14628 20724 9317 13955 6747

Components of Gdp

Source: RBI

I fl i


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Inflation

4.8

6.28

9.1

3.6

13

8.69.5

8.8 9

7.8 8

WPI (AVERAGE) CPI (AVERAGE)

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

Inflation Rate in India is repor

of Commerce and Industry. Historically, from 1969 until 2

Rate averaged 7.8 Percent rhigh of 34.7 Percent in Septerecord low of -11.3 Percent in

PrimaryArticles

20%

FuePo15

ManufacturedProducts

65%

WHOLESALE PRICE I

Primary Articles Fuel and PowerIn India, the wholesale price index (WPI) is the mainmeasure of inflation. The WPI measures the price of arepresentative basket of wholesale goods.

Wholesale price index is divided into three groups:

Source: Planning Commission & Tradingeconomics.com


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Sector-Wise Domestic Savings

(Base Year: 2004-05)

Year

Household SectorPrivate

CorporateSector

Public Sector

GrossDomesticSavings(4+5+6)

FinancialSavings

PhysicalTotal (2+3)

Savings

1 2 3 4 5 6 7

2005-06 4383 4307 8690 2772 890 12352

2006-07 4843 5101 9944 3386 1529 14859 2007-08 5802 5381 11183 4690 2490 18363

2008-09 5710 7598 13309 4175 543 18026

2009-10 8356 8035 16390 5321 118 21830

2010-11 7677 9816 17493 6025 1302 24819

Source : RBI


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2007-08 2008-09 2009-10 2010-11 2011-1

Exports (US$bn) 166.2 189 182.4 250.5 309.8

% YoY 28.9 13.7 -3.5 37.3 23.7

Imports (US$bn) 257.6 308.5 300.6 381.1 499.5

%YoY 35.1 19.8 -2.6 26.7 31.1

Trade deficit (US$bn) -91.5 -119.5 -118.2 -130.6 -189.8

Invisibles (US$bn) 75.7 91.6 80 84.6 111.6

Current Account Deficit (US$bn) -15.7 -27.9 -38.2 -45.9 -78.2

% to GDP -1.3 -2.3 -2.8 -2.7 -4.2

Trade

Source: Planning Commission, Govt. of India


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-300 -200 -100 0 100 200 300

Exports (US$bn)

Imports (US$bn)

Trade deficit (US$bn)

Invisibles (US$bn)

Current Account Deficit (US$bn)

2007-08 2008-09 2009-10 2010-11 2011-12 2012

Trade


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DEVELOPMENTAL AND NON-DEVELOPMENTAL

EXPENDITURE OF THE CENTRAL GOVERNMEN

YearDevelopmental

expenditure

of which Non-developmental TEconomic services Social services expenditure

1 2 3 4 5

2006-07 2557 1428 438 3413

2007-08 3257 1730 616 4007

2008-09 4714 2732 898 4281

2009-10 5282 3044 1026 5141

2010-11 6661 4043 1250 5515

2011-12 RE 7113 4504 1078 6362

2012-13 BE 7767 4587 1293 7385

RE : Revised Estimates, BE : Budget Estimates


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Outstanding Liabilities of Central Government

Year (end-March)

Internaldebt

of which

Small

Otheraccounts

Reserve Total

savings, funds and internal

deposits & deposits liabilities

provident (2+6+7+8

Marketloans

91-daytreasury

bills

182/364-day

funds

treasury

bills

1 2 3 4 5 6 7 8 9

2006-07 15449 9728 308 426 5394 2201 1312 2435

2007-08 17996 11045 303 413 5536 2450 1270 27252008-09 20198 13381 755 657 5535 3340 1286 3036

2009-10 23283 17466 715 629 6206 3274 1194 3395

2010-11 26671 20720 703 644 6805 3046 1287 3781

2011-12 RE 32024 25084 1344 1427 6845 2861 1276 4300

2012-13 BE 37436 29874 1294 1567 6965 2719 1350 4847



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Centre's Gross Fiscal Deficit (GFD) and its Financing

Year GFD receiptsGFD

expenditure

GrossFinancing of GFD

fiscal

deficit

Externalfinance

Internal finance

(3-2)Market

borrowingsOther

borrowings

Draw doof cas

balanc

1 2 3 4 5 6 7 8

2006-07 4349 5775 1426 85 1148 148 45

2007-08 5807 7076 1269 93 1306 142 -272

2008-09 5408 8778 3370 110 2470 264 526

2009-10 5974 10159 4185 110 3944 145 -14

2010-11 8113 11849 3736 236 3264 172 64

2011-12 7825 13045 5220 103 4843 520 -247

2012-13 9657 14793 5136 101 4930 104 0



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FOREIGN INVESTMENT INFLOWS

Year

Gross inflows/Gross

Investments

Repatriation/

Disinvestment

DirectInvestment to

IndiaFDI by India

Net ForeignDirect

Investment

Net Po

Inves

RupeesBillion

US $Million

RupeesBillion

US $Million

RupeesBillion

US $Million

RupeesBillion

US $Million

RupeesBillion

US $Million

RupeesBillion

2006-07 1030 22826 4 87 1027 22739 677 15046 349 7693 319

2007-08 1399 34843 5 116 1394 34727 756 18836 638 15891 1106

2008-09 1914 41873 8 166 1906 41707 905 19364 1001 22343 -650

2009-10 1796 37745 218 4637 1578 33108 718 15143 860 17965 154

2010-11 1500 34847 319 7018 1181 27829 752 16524 429 11305 1394

2011-12 2200 46553 650 13598 1550 32955 518 10950 1032 22006 856

Source : RBI


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FOREIGN EXCHANGE RESERVES

End ofFinancial Year

SDRs GoldForeign Currency

AssetsReserve Tranche

Position

(Rupees

Billion)

(USD

Million)

(Rupees

Billion)

(USD

Million)

(Rupees

Billion)

(USD

Million)

(Rupees

Billion)

(USD

Million)

2006-07 0.08 2 295.73 6784 8365.97 191924 20.44 469

2007-08 0.74 18 401.24 10039 11960.23 299230 17.44 436

2008-09 0.06 1 487.93 9577 12300.66 241426 50.00 981

2009-10 225.96 5006 811.88 17986 11496.50 254685 62.31 1380

2010-11 204.01 4569 1025.72 22972 12248.83 274330 131.58 2947

2011-12 228.60 4469 1382.50 27023 13305.11 260069 145.11 2836

Source : RBI

Impact of Budget


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Impact of Budget

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 theof 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

The fiscal measures undertaken by the government affect public expenditure. For instance,taxes would decrease disposable income, thus reducing demand for goods. This decrease in dinto a decrease in production, therefore affecting economic growth.

Similarly, an increase in indirect taxes would also decrease demand. This is because indirect ta

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 comdown production and growth.

Non-plan expenditure like subsidies and defence also affect the economy as limited governmefor non-productive purposes.


Know Your Finance Minister


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Know Your Finance Minister

P Chidambaram POSITION: Minister of Finance, India

INCUMBENT: Palaniappan Chidambaram

DATE OF BIRTH: September 16, 1945

TERM: Appointed in August 2012

KEY FACTS:

A member of the Indian National Congress and member of the lower house of parliament sinceChidambaram has held several ministerial posts since 1985.

This is Chidambaram's third stint as Finance Minister, having held the post in 1996-1998 and 2also served as Home Minister from December 2008 to July 2012, and as Deputy Commerce Minister on tw

He is widely credited with implementing a series of reforms, along with Prime Minister Manmstem a slowdown in growth, curb a widening fiscal deficit and attract more foreign investment into Asia'seconomy.

Chidambaram holds degrees from Madras University in Chennai and a Masters of Business Adfrom Harvard University. He is married and has a son.

Source : Reuters


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