An annual statement of the estimated receipts and expenditure of the government over the fiscal year is known as ____________.

The correct answer is Budget.

• Budget: An annual statement of the estimated receipts and expenditure of the government over the fiscal year (April - March in India). It outlines the intended revenue collection and spending.
• Plan Expenditure: Money the government spends on developmental activities.
• Non-Plan Expenditure: Money the government spends on obligatory services like defense, salaries, etc.
• Budget Surplus: It exists when the government's revenue exceeds its expenditures. This is the opposite of a deficit. 
• Balanced Budget: A situation in financial planning or the budgeting process where total revenues are equal to or greater than total expenses.

• Revenue Receipts (RR): Total income earned by the government from its regular activities and non-debt sources.
  • RR = Tax Revenue + Non-Tax Revenue
• Revenue Expenditure (RE): Regular expenses incurred by the government for its day-to-day functioning.
  • RE = Interest Payments + Grants + Salaries + Pensions + Subsidies + Maintenance
• Capital Receipts (CR): Total funds raised by the government from its non-recurring sources like borrowings, disinvestment, and loans.
  • CR = Borrowings + Disinvestment + Loans Recovered
• Capital Expenditure (CE): Expenditure incurred by the government on creating assets, like infrastructure, that have long-term benefits.
  • CE = Investments + Loans and Advances
• Fiscal Deficit (FD): It is the excess of total expenditure over total receipts, excluding borrowings.
  • FD = Total Expenditure - Total Receipts (excluding borrowings)
• Primary Deficit (PD): Fiscal deficit minus interest payments.
  • PD = Fiscal Deficit - Interest Payments
• Revenue Deficit (RD): It is the excess of revenue expenditure over revenue receipts.
  • RD = Revenue Expenditure - Revenue Receipts
• Gross Domestic Product (GDP): The total value of all goods and services produced within a country's borders in a specific time period.
  • GDP = Consumption + Investment + Government Spending + (Exports - Imports)
• Direct Taxes: Taxes levied directly on the income or wealth of individuals and organizations. Examples: Income Tax, Corporate Tax.
• Indirect Taxes: Taxes collected indirectly from consumers through the sale of goods and services. Examples: Goods and Services Tax (GST), Excise Duty, Customs Duty
• Deficit Financing: The government borrows money to meet its expenses when revenue falls short.
  • Deficit Financing = Total Expenditure - Total Receipts (excluding borrowings)
• Revenue Deficit as a Percentage of GDP: It measures the extent of reliance on borrowings for day-to-day expenses.
  • Revenue Deficit % of GDP = (RD / GDP) * 100​
• The Acworth Committee's recommendations, Railways' finances were separated in 1924, leading to the distinct Railway Budget from the General Budget.
• In 2017, the NDA Government ended the practice initiated in 1924 by merging the Railway Budget with the Union Budget, marking a departure from British-era norms.