Tag: the government budget and taxation

A key factor is defined as the factor in the activities of an undertaking which, at a particular point of time or over a period, will limit the volume of output. Other variant terms are limiting factor, Principal Budget Factor & scarce factor. Limiting factors are governed by both internal & external factors. It may be actual or potential. If a factor of production is in short supply, then the best-paying product becomes that which yields the highest contribution per unit of limiting factor.

Budgeting is usually done for short, mid-range, longer term time periods. A month, a quarter and a month are usually observed budget periods. However, budget period can vary with each entity. A family might do budgeting every month. In this case, budget period is of one month. Generally, a government has a budget period of 12 months. Determining the budget period is the first step in the budgeting process. Budget period can have intermediate control periods over which comparisons are made between budgeted and actual results.

A business may need to revise a budget continuously for the length of time it takes to complete a short-term project. If a business undertakes an expansion that requires three years to complete, it may need recurrent budget revisions during this time to meet short-term goals. Afterwards, the company may go back to a more fixed budget with long-term goals. In addition, a company that introduces a new product may need to continually revise the budget until actual figures for production costs and sales income is substantiated.

A company requires a particular budget that details categories of revenue and expenditures relevant to the particular business enterprise. Although most companies create budgets for a one-year period, ongoing evaluations regularly give the business more leeway in making adjustments as needed. Businesses utilize a budget revision process to trim excess spending, re-allocate revenues and make allowances for unexpected or uncommon expenses.

Non Tax Revenue receipts are those revenue receipts which are not generated by taxing the public. Under administration, public authorities can raise some funds in the form of fines, fees and penalties.

Tax is levied by government on their citizens to generate income for undertaking projects to boost the economy of the country and to raise the standard of living of its citizens. Union tax is a tax paid to central government. Stamp duties on financial documents, Taxes on railway freights and fares are not the examples of Union tax.

Fiscal policy refers to the use by the government of the various instruments such as taxation, expenditure and borrowing to achieve the objectives of balanced economic development, full employment, etc. The budget or the annual financial statement of the government, gives expression to its fiscal policy.
In accordance with Article-112 of the Indian Constitution, the President shall cause to be laid a financial statement before both the houses of parliament at the commencement of every financial year of the estimated receipts and expenditure of the Government of India for that year.