Friday 25 February 2011

Basic terms of business and commerce

36. What is the difference between fiscal deficit and revenue deficit? 
Fiscal deficit is broader in comparison to revenue deficit. Revenue deficit takes into account only revenues and expenditure (it doesnt include capital expenditure and long term borrowings). But fiscal deficit includes capital revenues and captial expenditure also.
  
37. What is the difference between plan and non plan expenditure ? 
Plan expenditure = for new projects, developmental work nonplan expenditure = every year the government has to spend some money on maintenance, staff salary, interest payments etc. All these are called non-plan expenditure
  
38.What is the difference betwen revenue and capital expenditure ? 
Revenue expenditure is for revenue head (which is having impact on one year). Capital expenditure is related to long term impact creating things – like building / assets etc. (capital = long term investment)
  
39. What are the sources of revenue for the governments? 
1. indirect tax (the biggest source of income for any government – it includes excise, customs, etc.) (the burden of this tax is borne by common people as consumers) 2. direct tax – it includes that tax whic is borne by the tax payer (example : income tax, wealth tax, etc. ) 3. income from PSUs (now the govt. Is disinvesting its profit making units, so this source of income will reduce in future). 4. disinvestment = sale of PSU – now this is becoming a major source of income for the govt – who will tell that it is not good to kill the goose that gives golden eggs.
  
40. What is PSU? 
PSU = public sector unit – there are many examples : Navratnas & Maharatnas : for example : IOC, ONGC, GAIL, SAIL, NTPC, MTNL etc./

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