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

What does the term “elasticity of demand” measure?

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What is the main purpose of monetary policy?

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Which of the following is an example of a renewable resource?

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What does “primary sector” of the economy include?

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Which of the following statements best defines Gross Domestic Product (GDP)?

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What is the meaning of “supply-side economics”?

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What is the main function of the Reserve Bank of India (RBI)?

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Which term refers to the decrease in the value of a currency relative to foreign currencies?

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Which economic concept is described as “the next best alternative foregone”?

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What is meant by “stagflation”?

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