India on 08-05-2014 (Thursday) launched its own payment gateway ‘RuPay‘, equivalent of Visa and Mastercard, which will work on ATMs and mechant outlets and help in reducing cash transactions. President Pranab Mukherjee unveiled the indigenous card at a function in Rashtrapati Bhavan.
Dedicating it to the nation, Mukherjee said India is one of the few countries in the world to have its own card payment gateway.
The RuPay platform – developed by National Payments Corporation of India (NPCI) – is being used by certain banks like ICICI, State Bank of India, Punjab National Bank, among others, for clearing and settlement.
RuPay, which works on three channels – ATMs, Point of Sales (POS) and online sales, is the seventh such payment gateway in the world. A variant of pre-paid RuPay card would shortly be launched by IRCTC, which will help in booking railway tickets.
RuPay will not only reduce dependence on cash, but will offer users diverse set of payment option within the country, Mukherjee said.
The RuPay card is accepted at all ATMs (1.6 lakh plus), 95 per cent of PoS terminals (9.45 lakh plus) and most of the eCom merchants (about 10,000) in the country.
What are planned and non-planned expenditure in a budget?
There are two components of expenditure, plan and non-plan. Plan expenditures are estimated after discussions between each of the ministries concerned and the planning commission. Non-plan revenue expenditure Non-Plan expenditure is a generic term, which is used to cover all expenditure of Government not included in the Plan. It includes both developmental and non-developmental expenditure. Part of the expenditure is obligatory in nature e.g. interest payments, pensionary charges and statutory transfers to States. A part of the expenditure is an essential obligation of a State, e.g. Defense and internal security.
What is a Finance Bill?
It is the Government proposal for levying new taxes. Changes in the present tax structure, continuance of existing tax structure beyond the period approved by the Parliament. The Parliament may approve the bill for a period of one year at a time, which then becomes a Finance Act.
What is source and use of funds?
For an individual, his source of funds could include his salary, income from fixed deposits, dividends, rent from property etc. For the Government, it would include all sources like income tax, customs duties, sales tax etc. The use of funds for an individual is how he allocates his funds for various expenditure items like rent, entertainment, travel etc. For a Government, money would be allocated towards administrative expenditure and various developmental activities like education, social welfare, interest payment etc.
Most of us do not watch the budget or read through the budget from news papers and web sites. One can attribute many reasons for this. Some of the most common reasons are
· I do not understand the terminologies
· What is in it for me?
· It is meant for politicians and not for us
· There is nothing new in the budget.
But the basic reason for us not following the budget is that we do not feel and appreciate that we are stake holders in the entire process. We do not feel this way if it is our own house budget for the year and would take responsibility and act as a stakeholder.
This series is meant to help us understand the various terminologies used in the budget.
What does a stakeholder mean?
In simple terms, when you buy a share of a company and it makes profits, you have the right to have your share of dividends and capital gains. When this concept is applied to the national budget, every Indian is a stakeholder. When a country produces a budget surplus, it is like retained earnings of a company and all the shareholders have a right to share the surplus. Similarly, when a country’s budget is in deficit, the shortage of revenue must be paid by us. If the present government manages to postpone its liability, the future generations will have to take the responsibility to pay for the debt. Hence there is so much at stake for all of us and hence we as stakeholders should understand the budget terminologies.
In this series of blogs, we shall try and understand various terminologies using a simple approach of questions and answers.
This is based on a report prepared by professors from the Institute for Financial Management and Research and is focused on spreading the awareness of getting the common man inclined to pay attention to and understand the national budget presented every year in the Parliament.
What is a Gross Domestic Product?
Gross Domestic Product measures the income of everyone in the economy and equivalently the total expenditure on the economy’s output of goods and services. Gross Domestic Product is often considered as the best measure of how well the economy is performing.
What is a budget?
A budget is a general list of all planned, estimated expenses and revenues. It is also defined as a document used to project future income and expenses. It is at best an estimate and so deviations from the estimate either positive or negative are possible.What is a budget deficit?
A budget deficit is a common economic phenomenon that occurs when the spending of the government exceeds its revenue. It may also be referred as fiscal deficit.
What are the revenue sources of the government?
He critical revenue sources of the government are
Direct taxes: E.g. Income tax, corporate tax, wealth tax etc.
Indirect taxes: E.g. Sales tax, customs and excise duties
What is direct tax?
Direct taxes generally refer to taxes paid directly to the government by persons on whom it is imposed. All direct tax matters are taken care of by the Central Board of Direct Taxes (CBDT) which is a division of the Department of Finance, Government of India.
What is an indirect tax?
Indirect tax is the tax collected by an intermediary from the person who ultimately bears the ultimate economic burden of the tax. An indirect tax may increase the price of the good and the customers pay the tax by paying more for the goods. Excise duty, customs duty, service tax are examples of indirect taxes. A direct tax cannot be shifted to another one by the tax payer whereas an indirect tax can be.
What is divestment?
Divestment is a process by which a company sells a part of its stake in a public sector undertaking. The money raised is then used to meet various Government expenditures.