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Highlights…

The general Highlights of the railway budget presented by Mr.Lalu Prasad Yadav on 26th February are as follows:-

• AC I class fares reduced by 7%

• AC II class fares reduced by 4%

• Re1 discount on fares up to Rs 50 in non-suburban II class

• 5% discount on 2nd class fares in Mail/Exp.

• 2% cut in fares of new – look sleeper class

Railway Budget

• 5% cut in freight rate for petrol and diesel

• 14% reduction in freight rate for fly ash

• 6% freight concession on traffic to North – East states

• Special train for Commonwealth Youth Games

• Mumbai Suburban to get 300 more services…

• Termination of queues at ticket counters targeted in two years

Mr. Laallu Prasad Yadav Presenting the Budget

Annual plan stands at Rs 37500 Crore

• New lines to cost Rs 1730 cr

• New gauge conversion cost at Rs 2489 cr

• Electrification cost Rs 626 cr

• Outlay for amenities at Rs 852 cr

• Revenues from freight Rs 21682 crore, passenger Rs 2420 cr

Railway Minister

• Public private partnership (PPP) mulled for attracting investment

• Rs 100000 cr worth PPP projects in next 5 years

• Earnings from coaching and sundry Rs 5000 cr.

• PPP projects include developing world-class stations, multi-modal logistics parks and running container trains etc.

Apart from all these in passenger services also, it was announced about the introduction of 10 new garib Raths (poor man’s air-conditioned trains), 53 pairs of new trains, extension of 16 pairs of trains and increase in frequency of 11 pairs.

Keep Reading to Know About The Budget(General) Highlights And Do Post Your Comments…

The Budget process is a gigantic exercise. The exercise has different stages and each stage kicks off at a different stage of Budget making process.
The two sides of the Budget.

Like everyone’s family the nation’s budget too had two sides or we major parts : Revenue(incomes,profits,gains) n Expenditure(expenses)..
Assessing the incomes n profits from various department heads is primarily the function of The departments of revenues on the other hand The expenditure departments takes into accounts all expenses of the current as well as estimates of the next year.

Budget

The Department of Expenditure also assesses the resources of the public sector undertakings (PSUs). The Budget division is a part of the Department of Economic Affairs.

The Finance Secretary coordinates the overall Budget-making process. All of them keep the finance minister informed and seek directions from time to time. The Chief Economic Advisor assists the concerned departmental officer in this process.

1. Let’s see the Revenue side

Leaving all the tax receipts, the other sources of revenue which goes into the budget are the dividends which are paid by PSUs on the government shareholding, , including the interim(short term) dividends and the capital receipts on account of the divestment(reduction of some kind of asset for either financial goals or ethical objectives) of the government share holdings.

• What else??

Besides the external receipts it also takes into account all the borrowings from international agencies like World Bank, ADB, etc. these all are included in the assessment gross budgetary resources of various programmes under various ministries.

Resources of the public sector undertakings, including their operating surplus (A component of value added and referred to as "mixed income") and the borrowings by them; also constitute an important component of the gross budgetary resources and goes to fund their plan.

The basic policy of PSU for getting funds for its plans is from its own resources but in some strategic and economically vital areas where the budgetary support is needede based on the recommendations of the Planning Commission.

This assessment of the Internal and External Budgetary Resources (IEBR) conducted by the Department of Expenditure forms part of the total plan resources and is also reflected in the budget documents.

Budget

• 10 things to do before March 31

To estimate the earnings of PSUs, the government invites the finance directors of the PSUs . A joint secretary level officer of the ministry of finance holds one-on-one meeting with the PSU chairmen to estimate the revenues.

He passes on the information to Expenditure Secretary, who in turn, passes on the information to Finance Secretary. This exercise starts usually in the month of August/September. This revenue forms a part of plan expenditure.

Based on the inputs of different ministries Revised Estimate (RE) is prepared.RE means revising once again as to how much is actually required by the ministry.

• Last Step in Revenue Side

As a part of the expenditure management, the government issues instructions to various ministries to adhere to the quarterly expenditure schedule and to avoid the bunching of expenditures that may occur in last quarter.

Additional funds are also provided in the RE stage because it is important for the non-plan requirement for the next year..
Plan allocations are to be provided by the Planning Commission later based on the total gross budgetary support (GBS) indicated by the ministry of finance. This exercise starts in the month of October-December.

As is known, the Department of Revenue, the ministry of finance has two boards — Central Board of Direct Taxes (CBDT) and Central Board of Excise and Customs (CBEC). By mid-January, these boards give the figure of tax collection up to December 31. For remaining three months, tax collection is assumed on the basis of previous trends.

The boards also estimate the tax revenue expected in next financial year. The honesty of the budget making depends on the realistic nature of these estimates particularly in the face of the economic discipline imposed by the FRBM Act.

It is a happy development in the past two or three years the estimates are generally not very wide off the mark.

To know more about the other side, i.e. Expenditure Side, Click Here..  Till then Do Post Your Comments..

An institution which accepts deposits, makes business loans, and offers related services.

Commercial banks also allow for a variety of deposit accounts, such as checking, savings, and time deposit.

HSBC Bank

These institutions are run to make a profit and owned by a group of individuals.

While commercial banks offer services to individuals, they are primarily concerned with receiving deposits and lending to businesses.

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In financial economics, a financial institution acts as an agent that provides financial services for its clients or members.

NABARD

Financial institutions generally fall under financial regulation from a government authority.

Financial institutions provide a service as intermediaries of the capital and debt markets.

They are responsible for transferring funds from investors to companies, in need of those funds.

The presence of financial institutions facilitates the flow of monies through the economy.

Some examples of financial institutions are – Export-Import Bank of India (Exim Bank), Industrial Development Bank of India (IDBI), Industrial Finance Corporation of India (IFCI), National Bank for Agriculture and Rural Development (NBARD), Reserve Bank of India, Small Industries Development Bank of India (SIDBI).

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A mutual fund is simply a financial intermediary that allows a group of investors to pool their money together with a predetermined investment objective.

The mutual fund will have a fund manager who is also known as the portfolio manager and is responsible for investing the pooled money into specific securities (usually stocks or bonds) and collects the dividend or interest income.

The investment proceeds are then passed along to the individual investors.

Mutual Fund Companies

“A mutual fund is a professionally-managed form of collective investments that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities.”

When we invest in a mutual fund, we are actually buying shares (or portions) of the mutual fund and become a shareholder of the fund.
Mutual funds are one of the best investments ever created because they are very cost efficient and very easy to invest in (we don’t have to figure out which stocks or bonds to buy).

Common mutual fund companies are – Reliance Mutual Funds, LIC Mutual Fund, Fund Unit Trust of India, Tata Mutual Fund, SBI Mutual Funds and much more like these.

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Demat account is an account wherein you can hold shares of various companies in the dematerialized [electronic] form.
You can open a demat account with a share brokerage or a bank.

DeMat account

You should necessarily have a PAN card for opening such an account.

You can operate your account by giving the filled in delivery instruction slips provided for selling the shares in your account.

The shares you buy will get credited to your account a few days after you buy.

In India, a demat account, the abbreviation for dematerialized account, is a type of banking account which dematerializes paper-based physical stock shares.

The dematerialized account is used to avoid holding physical shares: the shares are bought and sold through a stock broker.

This account is popular in India. The Securities and Exchange Board of India (SEBI) mandates a demat account for share trading above 500 shares.

Various benefits for which Demat account is must are:-

• A safe and convenient way to hold securities;

• Immediate transfer of securities;

• No stamp duty on transfer of securities;

• Elimination of risks associated with physical certificates such as bad delivery, fake securities, delays, thefts etc.;

DeMat Account

• Reduction in paperwork involved in transfer of securities;

• Reduction in transaction cost;

• No odd lot problem, even one share can be sold;

• Nomination facility;

• Automatic credit into demat account of shares, arising out of bonus/split/consolidation/merger etc.

• Holding investments in equity and debt instruments in a single account.

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Mexico Stock Exchange

A stock exchange, share market or bourse is a corporation or mutual organization which provides facilities for stock brokers and traders, to trade company stocks and other securities.

The Securities Contract (Regulation) Act, 1956 defines a stock exchange as an association, organization or body of individuals, whether incorporated or not, established for the purpose of assisting, regulating and controlling of business in buying, selling and dealing in securities.

Every stock exchange has a specific location.

Stock Exchange

Only members who have applied and obtained membership are authorized to trade there.

Brokers serve as intermediaries between the buyers and sellers.
Securities that are traded on the stock exchange are known as listed securities.

Stock exchanges have multiple roles in the economy, this may include the following :-

• Raising capital for businesses

• Mobilizing savings for investment

• Facilitating company growth

• Redistribution of wealth

• Corporate governance

• Creating investment opportunities for small investors

• Government capital-raising for development projects

• Barometer of the economy

Wall Street Stock Exchange

Twenty Major Stock Exchanges in the World are as follows:-

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This is the practice followed by a company to make preferential allotment of securities to selected persons, who are normally the promoters, etc.

At a price unrelated to the prevailing market price.

The advantage is that funds are obtained at a minimal cost as compared to the public issue or the private placements methods.

But preferential allotments have been sometimes misused by companies.

Currency

Each shareholder has the right to subscribe to the new shares in the portion of shares he already holds.
The shareholder may either accept the offer for himself or assign a part or all of his rights to another.

Such rights are valuable to shareholders as they are at price below the current market price.
The right issue is an inexpensive and convenient way of raising additional capital as compared to the amount already issued.

A rights issue to the existing shareholders is a mandatory requirement.

The issue of additional shares to other parties without giving the existing shareholders the opportunity to subscribe would reduce the existing shareholders’ proportion of the total capital; i.e.it would ‘water’ their equity.

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