Introduction

Public economics (or economics of the public sector) is the study of government policy through the lens of economic efficiency and equity. At its most basic level, public economics provides a framework for thinking about whether or not the government should participate in economics markets and to what extent its role should be. In order to do so, microeconomic theory is utilized to assess whether the private market is likely to provide efficient outcomes in the absence of governmental interference. Inherently, this study involves the analysis of government taxation and expenditures. This subject encompasses a host of topics including market failures, externalities, and the creation and implementation of government policy. Public economics builds on the theory of welfare economics and is ultimately used as a tool to improve social welfare.

Budget

An annual financial statement of income and expenditure is generally used for a government, but it could be of a firm, company, corporation etc
The Constitution of India has a provision (Art. 112) for such a document called Annual Financial Statement to be presented in the Parliament before the commencement of every new fiscal year-popular as the Union Budget

data in union Budget

The Union Budget has three sets of data for every concerned sector or sub-sector of the economy.
(i) Actual data of the preceding year (here preceding year means one year before the year in which the Budget is being presented. Suppose the Budget presented is for the year 2016-17, the Budget will give the final/actual data for the year 2014-15 because the Budget is presented in February end of financial year 2015-16. After the data either we write 'A', means actual data/final data or write nothing (India writes nothing).
(ii) Provisional data of the current year (since the Budget for 2016-17 is presented at the end of the fiscal 2016-17, it provides Provisional Estimates for this year (shown as 'PE' in brackets with the data).
(iii) Budgetary estimates for the following year (here following year means one year after the year in which the Budget is being presented or the year for which the Budget is being presented, i.e., 2017-18. This is shown with the symbol 'BE' in brackets with the concerned data.)

Revised Estimate (RE)

Revised Estimate is basically a current estimation of either the budgetary estimates (BE) or the provisional estimates (PE). It shows the contemporary situation. It is an interim data

Quick Estimate (QE)

Quick Estimate is a kind of revised estimate which shows the most latest situation and is useful in the process of going for future projections for some sector or sub-sector. It is an interim data.

Advance Estimate (AE)

Advance Estimate is a kind of quick estimate but done ahead (is advance) of the final stage when data should have been collected. It is an interim data

Plan and Non-Plan Expenditure

Every expenditure incurred on the public exchequer is classified into two categories-the plan and the non-plan. All those expenditures which are done in India in the name of planning is the plan expenditure and rest of all are non­ plan expenditures. Basically, all asset creating, and productive expenditures are plan and all consumptive, non-productive, non-asset building are non-plan expenditures and are developmental and non-developmentalexpenditures, respectively.
Since the financial year 1987-88, there was a terminology change in Indian public finance literature when developmental and non­ developmental expenditures were replaced by the new terms plan and non-plan expenditures, respectively. (It was suggested by the Sukhomoy Chakravarti Committee.)

Dr. C. Rangarajan (Chairman, Prime Minister's Economic Advisory Council), in September 2011 suggested for redefining Plan and Non Plan expenditures as Capital and Revenue expenditures, as the former set of terms 'blur the classification' -this will facilitate linking expenditure to 'outcomes' and better public expenditure, the panels suggested

Major suggestions of the Panel were

(i) Plan and Non-Plan distinction in the Budget is neither able to provide a satisfactory classification of 'developmental' and 'non-developmental' dimensions of government expenditure nor an appropriate budgetary framework. It has therefore become 'dysfunctional',
(ii) Suggests for redefining the roles of the Planning Commission (PC) and the Finance Ministry (FM). According to which the PC should be responsible for formulation of the five-year plan and the task of firming up the annual budgets should be entrusted to the FM.
(iii) The PC should dispense with the exercise of approving annual plans of states and it could hold a strategy or review meeting with representatives of the states.
(iv) Public expenditures should be split into capital and revenue expenditures.
(v) Public expenditure should have 'management approach' based on measurable 'outcomes', indicating that the reponsibility should be assigned to the FM.

Revenue

Every form of money generation in the nature of income, earnings are revenue for a firm or a government which do not increase financial liabilities of the government, i.e., the tax incomes, non-tax incomes along with foreign grants

non-revenue

Every form of money generation which is not income or earnings for a firm or a government (i.e., money raised via borrowings) is considered a non-revenue source if they increase financial liablities

Receipts

Every receiving or accrual of money to a government by revenue and non-revenue sources is a receipt. Their sum is called total receipts. It includes all incomes as well as non-income accruals of a government.

Revenue Receipt

The term “Revenue Receipt” is made up of two words revenue and receipts. Any income that does not generate a liability is revenue. For example, if the Government borrows money from World Bank, it will increase its liabilities (because this money has to be paid back)- so cannot be called revenue. However, if the government gets the same money has grant (donation), its revenue receipt because grants are not to be paid back.
Taxes are the most important revenues receipts of the governments. However, some revenue receipts are non-tax revenues such as grants. On this basis, revenue receipts are of two types viz. Tax Revenue and Non-tax revenue.

Tax Revenues

Tax revenues are either from direct taxes or indirect taxes. Direct tax generally means a tax paid directly to the government by the persons on whom it is imposed. Income Tax, Gift Tax, Wealth Tax and Property tax etc. are direct taxes. Indirect tax is a tax collected by an intermediary (such as a retail store) from the person who bears the ultimate economic burden of the tax (such as the consumer). Goods and Services tax (GST) or any other such tax is an indirect tax.

Non-Tax Revenue

Non Tax Revenue Receipts are those revenue receipts which are not generated by Taxing the public.
Money which the Government earns as “Dividends and profits” from its profit making public enterprises (PSUs).
Interest which the Government earns on the money lent by it to external or internal borrowers. Thus this revenue receipts may be in foreign currency as well as Indian Rupees.
The money which the government receives out of its fiscal services such as stamp printing, currency printing, medal printing etc.
Money which the Government earns from its “General Services” such as power distribution, irrigation, banking services, insurance, and community services etc. which make the part of the Government business.
Money which the government accrues as fees, fines, penalties etc.
Grants the Government of India receives from the external sources. In case of the state Governments, it may be the internal grant from the central Government.

Revenue Expenditure

A revenue expenditure is an amount that is expensed immediately—thereby being matched with revenues of the current accounting period.

A broad category of things that fall under such expenditures in India are:
(i) Interest payment by the government on the internal and external loans;
(ii) Salaries, pension and Provident Fund paid by the government to government employees;
(iii) Subsidies forwarded to all sectors by the government;
(iv) Defence expenditures by the government;
(v) Postal Deficits of the government;
(vi) Law and order expenditures (i.e., police & paramilitary);
(vii) Expenditures on social services (includes all social sector expenditures as education, health care, social security, poverty alleviation, etc.) and general services (tax collection, etc.);
(viii) Grants given by the government to Indian states and foreign countries.

Revenue Deficit

A revenue deficit occurs when the net income generated, revenues less expenditures, falls short of the projected net income. This happens when the actual amount of revenue received and/or the actual amount of expenditures do not correspond with budgeted revenue and expenditure figures
Governments fulfil the gap/deficit with the money which could have been spent/intvested in productive areas.

A government might have its revenue expenditures less than its revenue receipts, i.e.,having (revenue surplus) budget. Such fiscal policy is considered good where the government has been able to manage some money out of its revenue budget which could be spent for the creation of productive assets.

Effective revenue deficit (ERD)

The definition of the revenue expenditure is that it must not create any productive asset. However, this creates a problem in accounts. There are several grants which the Union Government gives to the state / UTs and some of which do create some assets, which are not owned by union government but by state government. For example, under the MGNREGA programme, some capital assets such as roads, ponds etc. are created, thus the grants for such expenditure will not strictly fall in the revenue expenditure.
So, to do away with such anomaly, the government introduced the Effective Revenue Deficit concept from Union Budget 2010-11. From 2012-13 onwards the Effective Revenue Deficit is being brought in as a fiscal parameter.

Effective Revenue Deficit is the difference between revenue deficit and grants for creation of capital assets. In other words, the Effective Revenue Deficit excludes those revenue expenditures which were done in the form of grants for creation of capital assets aka GoCA. Such grants include the grants given under:
>> Pradhan Mantri Gram Sadak Yojana
>> Accelerated Irrigation Benefit Programme
>> Jawaharlal Nehru National Urban Renewal Mission
>> MGNREGA etc.
The logic is clear; these expenses despite being shown in the accounts as Revenue Expenditures, are involved with asset creation and cannot be considered completely ‘unproductive’.

Revenue Budget

part of the Budget which deals with the income and expenditure of revenue by the government. This presents the annual financial statement of the total revenue receipts and the total revenue expenditure-if thebalance emerges to be positive it is a revenue surplus budget, and if it comes out to be negative, it is a revenue deficit budget.

Capital Budget

Capital Budget consists of capital receipts and payments. It also incorporates transactions in the Public Account.

Description

Capital receipts are loans raised by the government from the public (which are called market loans), borrowings by the government from the Reserve Bank and other parties through sale of treasury bills, loans received from foreign bodies and governments, and recoveries of loans granted by the Central government to state and Union Territory governments and other parties.

Capital payments consist of capital expenditure on acquisition of assets like land, buildings, machinery, and equipment, as also investments in shares, loans and advances granted by the Central government to state and Union Territory governments, government companies, corporations and other parties.

Capital receipts

Capital receipts are a non-recurring incoming cash flow into your business, which leads to the creation of a liability (a debt to be paid in the future) and a decrease in company assets (resources that lead to capital gain)

>> 1> Loan Recovery
This is one source of the capital receipts. The money the government had lent out in the past in India (states, UTs, PSUs, etc.) and abroad their capital comes back to the government when the borrowers repay them as capital receipts. The interests which come to the government on such loans are part of the revenue receipts.

>> 2> Borrowing., by the Government
This includes all long-term loans raised by the government inside the country (i.e., internal borrowings) and outside the country (i.e., external borrowings). Internal borrowings might include the borrowings from the RBI, Indian banks, financial institutions, etc. Similarly, external borrowings might include the loans from the World Bank, the IMF, foreign banks, foreign governments, foreign financial institutions, etc.

>> 3> Other Receipts by the Governments
This includes many long-term capital accruals to the government through the Provident Fund (PF), Postal Deposits, various small saving schemes (SSSs) and the government bonds sold to the public (as Indira Vikas Patra, Kisan Vikas Patra, Market Stabilisation Bond, etc.). Such receipts are nothing but a kind of loan on which the government needs to pay interests on their maturities. But they play a role in capital raising process by the government.

Capital Expenditure

money spent by a business or organization on acquiring or maintaining fixed assets, such as land, buildings, and equipment. All the areas which get capital from the government are part of the capital expenditure

>> 1> Loan Disbursals by the Government
The loans forwarded by the government might be internal (i.e., to the states, UTs, PSUs, Fis, etc.) or external (i.e., to foreign countries, foreign banks, purchase of foreign bonds, loans to IMF and WB, etc.).

>> 2> Loan Repayments by the Government of the Borrowing., Made in the Past
Again loan payments might be internal as well as external. This consists of only the capital part of the loan repayment as the element of interest on loans are shown as a part of the revenue expenditure.

>> 3> Plan Expenditure of the Government
This consists of all the expenditures incurred by the government to finance the planned development oflndia as well as the central government financial supports to the states for their plan requirements.

>> 4> Capital Expenditures on Defence by the Government
This consists of all kinds of capital expenses to maintain the defence forces, the equipment purchased for them as well as the modernisation expenditures. It should be kept in mind that defence is a non-plan expenditure which has capital as well as revenue expenditures element in its maintenance. The revenue part of expenditure in the defence is counted in the revenue expenditures by the government.

>> 5> General Services
These also need huge capital expenditure by the government-the railways, postal department, water supply, education, rural extension, etc.

>> 6> Other Liabilities of the Government
Basically, this includes all the repayment liabilities of the government on the items of the Other Receipts. The level of liabilities depends on the fact as to how much such receipts were made by the governments in the past. How much payment liabilities in which year also depends on the fact as to which years in the past the governments had other receipts and for what duration of maturity periods. As for example, the PF liabilities were not an item of such liabilities for almost first three decades after the independence. But once the government employees started retiring, it went on increasing. Future India (specially 1960s and 1970s) saw expansion of the PSUs and excessive employment generation in them (devoid of the logic of labour requirement). We see the PF liabilities expanding extensively throughout the 1990s-the governments had been under pressure to manage this segment either by cutting interest on PF or at present trying to make it a matter of market economy. Same thing happened with the element of pemion and we have been able to devise a market mechanism for it once pension reforms took place and the arrival of a pension regulatory authority for the area.

Capital Deficit

There is no such term in public finance or in economics as such. But in practice one usually hears the use of the term capital crunch, scarcity of capital in day-to-day economic news items. Basically, the government in the news is facing the problem of managing as much funds, money, capital as is required by it for public expenditure. Such expenditure might be of revenue kind or capital kind. Such difficulties have always been with the developing economies due to their high level requirement of capital expenditures. Had there been a term to show this situation, it would naturally have been Capital Deficit.

Fiscal Deficit

The difference between total revenue and total expenditure of the government is termed as fiscal deficit. It is an indication of the total borrowings needed by the government. While calculating the total revenue, borrowings are not included.

The gross fiscal deficit (GFD) is the excess of total expenditure including loans net of recovery over revenue receipts (including external grants) and non-debt capital receipts. The net fiscal deficit is the gross fiscal deficit less net lending of the Central government.
Generally fiscal deficit takes place either due to revenue deficit or a major hike in capital expenditure. Capital expenditure is incurred to create long-term assets such as factories, buildings and other development.
A deficit is usually financed through borrowing from either the central bank of the country or raising money from capital markets by issuing different instruments like treasury bills and bonds.

Primary Deficit

The deficit can be measured with or without including the interest payments on the debt as expenditures. The primary deficit is defined as the difference between current government spending on goods and services and total current revenue from all types of taxes net of transfer payments.

Monetised Deficit

The Monetised Deficit is the extent to which the RBI helps the central government in its borrowing programme. In other words, monetised deficit means the increase in the net RBI credit to the central government, such that the monetary needs of the government could be met easily.
The monetized deficit results in the increase in the net holdings of treasury bills by the RBI and also the RBI contribution towards the government’s market borrowings increases. With the issue of more money to the government, the money supply in the economy increases, as a result of which the inflationary pressure prevails. Hence, we can say that monetised deficits are the part of a fiscal deficit that leads to the inflation in the economy.
Thus, it can be concluded that monetised deficit occurs when the government takes a monetary support from the RBI to finance its debt obligations and try to reduce its unnecessary expenditures.

budget surplus

A budget surplus is a period when income or receipts exceed outlays or expenditures. A budget surplus often refers to the financial states of governments;

Budget deficit

When expenditures exceed income, the outcome is a budget deficit, which is funded by borrowing funds and paying interest on the borrowed money.

Composition of Fiscal Deficit

the following combinations of expenditure composition are suggested:
(i) A fiscal deficit with a surplus revenue budget or a zero revenue expenditure is the best composition of fiscal deficit and the most suitable time for deficit financing.
(ii) The deficit requirements for lower revenue expenditures and higher capital expenditures are the next best situation for deficit financing, provided revenue deficit is eliminated soon.
(iii) The last could be the situation when major part of deficit financing is to fulfil revenue expenditures and a minor part to go for capital expenditures. The total money of the deficit might go to fulfil revenue expenditure, which could be the worst form of it.

Fiscal Policy

fiscal policy is the use of government revenue collection (mainly taxes) and expenditure (spending) to influence the economy. According to Keynesian economics, when the government changes the levels of taxation and government spending, it influences aggregate demand and the level of economic activity. Fiscal policy is often used to stabilize the economy over the course of the business cycle

The three stances of fiscal policy are:

>> Neutral fiscal policy is usually undertaken when an economy is in equilibrium. Government spending is fully funded by tax revenue and overall the budget has a neutral effect on the level of economic activity.
>> Expansionary fiscal policy involves government spending exceeding tax revenue, and is usually undertaken during recessions. It is also known as reflationary fiscal policy.
>> Contractionary fiscal policy occurs when government spending is lower than tax revenue, and is usually undertaken to pay down government debt.

Deficit Financing in India

Deficit financing is the budgetary situation where expenditure is higher than the revenue. It is a practice adopted for financing the excess expenditure with outside resources. The expenditure revenue gap is financed by either printing of currency or through borrowing.

Nowadays most governments both in the developed and developing world are having deficit budgets and these deficits are often financed through borrowing. Hence the fiscal deficit is the ideal indicator of deficit financing.

THE FIRST PHASE (1947-1970)

This phase had no concept of deficit financing and the deficits were shown as Budgetary Deficits. Major aspects of this phase were-
(i) Trying to borrow from inside and outside the economy but unable to meet the target.
(ii) In the 1950s, a serious attempt was made to increase tax collections and check revenue expenditures to be ultimately able to emerge as a surplus revenue budget economy. But huge cost was paid in the form of tax evasion, rise in corruption, stagnating standard oflife and a neglected social sector.
(iii) Taking recourse to heavy borrowings from the RBI and finally nationalisation of banks so that their money could be used by the government to support the plans. This not only increased the interest burden of the governments but also ruptured the whole financial system in coming years-banks did not remain commercial entities and became part of the government's political statement.
(iv) Establishing giant PSUs with higher revenue expenditures (salaries) which increased the revenue expenditures of the future governments when the pensions and the PFs needed to be serviced.
(v) Unable to go for the required level of investment even after taking recourse to all the above given means.

THE SECOND PHASE (1970-1991)

This is considered the period of deficit financing, follow up of unsound fundamentals of economics and finally culminating in severe financial crisis by the year 1990-91. Major highlights of this phase may be summed up as follows-
(i) This phase saw the nationalisation policy and simultaneous revival of an increased emphasis on expansion of the PSU (two points should be noted here specially­ first, many of the South East Asian economies have, officially declared their acceptance of capitalism and privatisation. Secondly, China had declared that investment in the government-controlled companies are a loss of money at this time).
(ii) Upcoming PSUs increased the total expenditure of the government's revenue as well as capital.
(iii) Existing PSUs were taking their own due from the economy-the illogical employment creation excessively increased the burden of salaries, pensions and PF; many of them had started fetching huge losses by this time; as the public sector does not have profit as its primary goal; there was a lack of profit and loss analysis; as the PSUs had no connection between their need of labour force and the existing labour force. Ultimately, the responsibility of profit or loss did not remain the onus of the officers, thus making them centres of intentional losses and an institutionalised centre of corruption; etc.
(iv) The governments have failed on both the fronts-checking population rise and mass employment generation-the burden of different subsidies went on increasing making them unmanageable and highly illogical. Self-employment programmes could not pick up, or better said, it was politically suitable to go for piece-meal wage-employment programmes with different names.
(v) Planned development remained highly centralised and devoid of any place for local aspirations-frustrations of masses started showing up in the form extremist and radical organisations raising their heads creating a law and order problem and excessive expenditure on them. The outcome was a burdened police force and lagging judicial set up.
(vi) The plan expenditure which governments were going for were through investments in the PSUs which were not committed to profit motive, deficit financing for the PSUs was not based on sound economics. Majority of the plan expenditure in a sense turned out to be non-economic, i.e., non-plan expenditure at the end.
Due to the above-given reasons, it was tough to say whether it was sound to go for huge fiscal deficits in India

THE THIRD PHASE ( 1991 ONWARDS)

This started with the initiation of the economic reforms process under the conditionalities put forth by the IMF (controlling fiscal deficit was one amongst them). As the economy moved from government dominance to market dominance, things needed a restructuring and public finance also needed a touch of rationality. Till date, the government had been doing pure politics with the public money in the name of development. Now the IMF dictated and the economy headed towards greater and greater fiscal responsibility in the coming times. India is better today in this regard but we cannot say that public finance is based today on the sound principles of economics. But the rigorous process of fiscal reforms aiming at fiscal consolidation started in India.

FRBM Act, 2003

The Fiscal Responsibility and Budget Management Act, 2003 (FRBMA) is an Act of the Parliament of India to institutionalize financial discipline, reduce India's fiscal deficit, improve macroeconomic management and the overall management of the public funds by moving towards a balanced budget and strengthen fiscal prudence. The main purpose was to eliminate revenue deficit of the country (building revenue surplus thereafter) and bring down the fiscal deficit to a manageable 3% of the GDP by March 2008. However, due to the 2007 international financial crisis, the deadlines for the implementation of the targets in the act was initially postponed and subsequently suspended in 2009. In 2011, given the process of ongoing recovery, Economic Advisory Council publicly advised the Government of India to reconsider reinstating the provisions of the FRBMA. N. K. Singh is currently the Chairman of the review committee for Fiscal Responsibility and Budget Management Act, 2003, under the Ministry of Finance (India), Government of India.

Objectives

The main objectives of the act were:
>> to introduce transparent fiscal management systems in the country
>> to introduce a more equitable and manageable distribution of the country's debts over the years
>> to aim for fiscal stability for India in the long run
>> Additionally, the act was expected to give necessary flexibility to Reserve Bank of India(RBI) for managing inflation in India.

Fiscal Consolidation in India

Fiscal Consolidation refers to the policies undertaken by Governments (national and sub-national levels) to reduce their deficits and accumulation of debt stock.

Key deficits of government are the revenue deficit and the fiscal deficit. The gains from the economic reforms introduced in India in early nineties could not be sustained for a much longer period. Deficits were widening and by 1999-2000 the combined fiscal deficit (of centre and states) almost reached levels of the crisis year ‘1990-91’. Sustainability of debt too was becoming a major issue. In December 2000, Government of India introduced the Fiscal Responsibility and Budget Management (FRBM) Bill in the Parliament as it was felt that institutional support in the form of fiscal rules would help in setting the agenda for the future fiscal consolidation programme. The Twelfth Finance Commission recommended in November 2004 that state governments too enact their fiscal responsibility legislations. However, states like Karnataka, Kerala, Punjab, Tamil Nadu and Uttar Pradesh had already enacted their fiscal responsibility legislation even before the Commission recommended so.

Implementation of Fiscal Responsibility and Budget Management (FRBM) legislation at national as well as at sub-national levels in India during the period 2005-10 helped both the Union and the States to achieve considerable correction in their respective fiscal position, which was weak prior to 2005. The global slowdown in 2008-09 and 2009-10 however adversely affected the achievement of targets specified in the legislation. The Thirteenth Finance Commission (FC-XIII) has proposed a roadmap of fiscal consolidation for both centre and states. It has specified a combined debt target of 68 % for the Centre and States, to be met by 2014-15. For the Centre, a target of elimination of revenue deficit has been set by 2013-14 and fiscal deficit is to be brought down to 3 % by the same year. For States, the Commission has recommended a fiscal road map for each state depending on its current deficit and debt levels. Accordingly, States are required to eliminate revenue deficit and reduce fiscal deficit to 3 % of their GSDP, in stages, and in a manner that all states would achieve these targets latest by 2014-15. [By the end of 2009-10, the estimated debt of Centre and States was around 79 % of GDP and consolidated fiscal deficit of Centre and States at 9.5 %, during this year].The Medium Term Fiscal Policy Statement presented along with the Union Budget 2011-12, takes forward the process of fiscal consolidation of the Centre further. While the suggested roadmap of the 13th FC puts the fiscal deficit targets at 5.7 % and 4.8 % of GDP for the years 2010-11 and 2011-12 respectively, it has now been estimated at 5.1 % and 4.6 % respectively. The recommended debt target for 2014-15 of the 13th FC award period which is 44.8 % of GDP is expected to be achieved in the year 2011-12 itself (estimated at 44.2%). However, there seems to be problems in achieving the Revenue Deficit targets. Revenue expenditure of the Central Government also includes releases made to States and other implementing agencies for implementation of Government Schemes and programmes, amounting to about 1.6% of GDP. Leaving this out, the effective revenue deficit is about 1.8%, which is being endeavoured to be eliminated in the medium-term.

The Union Cabinet chaired by the Hon’ble Prime Minister on 6 April 2016 gave its approval to Recommendations on Fiscal Deficit Targets and Additional Fiscal Deficit to States during Fourteenth Finance Commission (FFC) award period 2015-20 under the two flexibility options recommended in para 14.64 to 14.67 of its Report (volume – I). FFC has adopted the fiscal deficit threshold limit of 3 per cent of Gross State Domestic Product (GSDP) for the States. Further, FFC has provided a year-to-year flexibility for additional fiscal deficit to States. FFC, taking into account the development needs and the current macro- economic requirement, provided additional headroom to a maximum of 0.5 per cent over and above the normal limit of 3 per cent in any given year to the States that have a favourable debt-GSDP ratio (means if debt-GSDP is not more than 25%, then an additional 0.25% fiscal deficit can be afforded) and interest payments-revenue receipts ratio (means if IP-RR is not more than 10%, then an additional 0.25% fiscal deficit can be afforded) in the previous two years. However, the flexibility in availing the additional fiscal deficit will be available to State if there is no revenue deficit in the year in which borrowing limits are to be fixed and immediately preceding year. If a State is not able to fully utilise its sanctioned fiscal deficit of 3 per cent of GSDP in any particular year during the 2016-17 to 2018-19 of FFC award period, it will have the option of availing this un-utilised fiscal deficit amount (calculated in rupees) only in the following year but within FFC award period

CRIS of India - Comparative rating index of sovereigns

Major credit rating agencies give out the sovereign credit rating of each nation as an absolute grade. A particular nation's rating score is independent of the performance of other nation. But in the comparative rating index of sovereigns (CRIS) introduced by India
performance of one nation is compared with all other nations. Perhaps it was the first sovereign rating index by any country in the world.
This solves the limitations of the existing credit rating system. An example of comparative rating is the percentile score—the way GATE results are at times given. If a student is described as belonging to the 99th percentile, it clearly says something about this student’s performance vis-à-vis other students.

Direct Benefit Transfer (DBT)

Direct Benefit Transfer or DBT is an attempt to change the mechanism of transferring subsidies launched by Government of India on 1 January 2013. This program aims to transfer subsidies directly to the people through their bank accounts. It is hoped that crediting subsidies into bank accounts will reduce leakages, delays, etc

DBT Structure

The primary aim of this Direct Benefit Transfer program is to bring transparency and terminate pilferage from distribution of funds sponsored by Central Government of India. In DBT, benefit or subsidy will be directly transferred to citizens living below poverty line. Central Plan Scheme Monitoring System (CPSMS), being implemented by the Office of Controller General of Accounts, will act as the common platform for routing DBT. CPSMS can be used for the preparation of beneficiary list, digitally signing the same and processing of payments in the bank accounts of the beneficiary using the Aadhaar Payment Bridge of NPCI

Main Programs part of DBT

National Child Labour Project
Student Scholarship
LPG subsidy
On June 1, 2013, the minister of Petroleum & Natural Gas, M Veerappa Moily formally launched the scheme direct benefit transfer for LPG (DBTL) Scheme in 20 high Aadhaar coverage districts. The subsidy on LPG cylinders will be credited directly to consumers' Aadhaar-linked bank accounts. All Aadhaar-linked domestic LPG consumers will get an advance in their bank account as soon as they book the first subsidized cylinder before delivery. On receiving the first subsidized cylinder subsidy for next will again get credited in their bank account, which can then be available for the purchase of the next cylinder at market rate until the cap of 12 cylinders per year is reached