Budget • budget is a systematic plan for the expenditure of a usually

fixed resource during a given period.

• The Budget is the most extensive account of the Government`s finances, in which revenues from all sources and expenses of all activities undertaken are aggregated.

• It comprises the revenue budget and the capital budget.

• It also contains estimates for the next fiscal year called budgeted estimates.

Revenue Budget

• The revenue budget consists of revenue receipts of the government (revenues from tax and other sources) and the expenditure met from theserevenues.

Revenue receipts are divided into tax and non-tax revenue.

Tax revenues are made up of taxes such as income tax, corporate tax, excise, customs and other duties which the government levies.

• Non-tax revenue consist of interest and dividend on investments made by government, fees and other receipts for services rendered by Government.

• Revenue expenditure is the payment incurred for the normal day-to-day running of government departments and various services that it offers to its citizens.

• The government also has other expenditure like servicing interest on its borrowings, subsidies, etc.

• Usually, expenditure that does not result in the creation of assets, and grants given to state governments and other parties are revenue expenditures.

However, all grants given to state governments and other parties are also clubbed under revenue expenditure, although some of them may go into the creation of assets.

The difference between revenue receipts and revenue expenditure is usually negative. This means that the government spends more than it earns. This difference is called the revenue deficit.

Capital Budget• It consists of capital receipts and payments.

• The main items of capital receipts are loans raised by Government from public which are called Market Loans, borrowings by Government from Reserve Bank and other parties through sale of Treasury Bills, loans received from foreign Governments and bodies and recoveries of loans granted by 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, equipment, as also investments in shares, etc., and loans and advances granted by Central Government to State and Union Territory Governments, Government companies, Corporations and other parties.

Capital Budget also incorporates transactions in the Public Account.

Union and Concurrent List

• The relation between Union and States is the very bedrock of the Indian Federal system.

• India is a federal State with a national government and a government of each constituent state.

• The Indian government follows a strong central bias.

• Based on the distribution of powers between the Central Government and the State Government there are three lists – – Union list, – State list and – Concurrent list (powers entertained by both

center and state).

• The Union List: Also referred to as List I, this list contains legislations, on which the Union enjoys exclusive control. There are 99 subjects that are included in the Union list, some of them are

• Defence• Banking• Taxes• Coinage• Insurance• Currency• Union Duties• Foreign Affairs

• The State List: This is the List II of the Indian Legislative. There are a total of 69 subjects in this particular list, all of which are exclusive legislative powers of the State.

– Public Order and Police– State Taxes and Duties– Agriculture– Sanitation– Local governments– Forests– Fisheries– Public Health

• The Concurrent List: This list contains 52 items, which are powers vested on the State as well as the Union. Some of the subjects included in the Concurrent List are :

• Economic and Social Planning• Criminal Law and Procedure• Civil Procedure• Torts• Trusts• Marriage• Education• Welfare and Labor• Contracts

Consumerism• Consumerism can be defined as a social movement seeking to augment the right

of buyers in relation to seller.

• purchasing of new goods and services, with little attention to their true need, durability, product origin or the environmental consequences of manufacture and disposal.

• driven by huge sums spent on advertising designed to create both a desire to

follow trends, and the resultant personal self-reward system based on acquisition.

• the production, processing, and consumption, of commodities requires the extraction and use of natural resources (wood, ore, fossil fuels, and water);

• it requires the creation of factories and factory complexes whose operation creates toxic byproducts, while the use of commodities themselves (e.g. automobiles) creates pollutants and waste.

Consumer Rights

• Right to safety• Right to be informed• Right to choose• Right to be heard• Right to enjoy a clean and healthful

environment• Right of the poor and other minorities to

have their interests protected

Right to Safety : Consumers have the right to be protected against products and services that are hazardous to health and life.

Right to be informed: The consumer has the right to be protected against fraudulent, deceitful or grossly misleading information, advertising, labeling, or other practices, and to be given the facts that (s)he needs to make an informed choice.

Right to choose: Consumers have the right to assured access, to a variety of products and services at competitive prices. In those industries in which competition is not workable, government regulation is substituted to assure unsatisfactory quality and service at fair prices

Right to be heard (redress): Consumers have the right to be assured that consumer interests will receive full and sympathetic consideration in the formulation of Government policy and fair and expeditious treatment in its administrative tribunals.

Right to enjoy a clean and healthful environment: Environmental issues; Pollution issues

Cooperative Society

• An autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.

Types of Cooperatives• Housing cooperative • Building cooperative • Retailers' cooperative • Utility cooperative • Worker cooperative • Business and employment co-operative • Social cooperative • Consumers' cooperative • Agricultural cooperative • Cooperative banking (credit unions and cooperative

savings banks) wholesale society Cooperative

Growth of Cooperatives in India

• National Cooperative Development Corporation (NCDC) was established in 1963 under NCDC Act 1962 to promote production, marketing and export of agricultural produce.

• Number of Cooperatives Societies increased from 35 thousand in 1965-66 to 545 thousand in 2002-03.

• Today, Cooperatives cover each & every village of India.

Government Policies : • The Union Cabinet approved the National Cooperative Policy,

aiming at:

• Minimizing the say of the Government in Cooperatives.

• Redefining the role of Registrar of Coop. Societies as a facilitator for Coop. Societies.

• Repatriation of the Government’s equity in the Cooperatives by infusion of equivalent cooperative shares.

• Multi-State Cooperative Societies Act- 2002 ensures functioning of Cooperatives as autonomous Institutions.

• The new legislation reduces the role of Government and provides professionalism in Cooperatives to withstand competition.

• Government participation in the equity is allowed only when requested by the Society.

Grey Areas Of Cooperative Sector • Poor infrastructure, • Lack of awareness, • Lack of quality management, • Over-dependence on government, • Dormant membership, • Non-conduct of elections, • Lack of strong human resources policy, • Neglect of professionalism, • Restricted coverage

• Cooperatives are also unable to evolve strong communication and public relations strategies which can promote the concept of cooperation among the masses.

Corporate Social Responsibility• The impact of a company’s actions on society

• Requires a manager to consider his acts in terms of a whole social system, and holds him responsible for the effects of his acts anywhere in that system

• Businesses need to balance economic, legal, and social responsibilities in order to achieve long-run success.

• More generally, there is a often a relationship between good social and good financial performance.

Corporate Social Responsibility Continuum

• Do what it takes to make a profit; • Fight CSR initiatives• Comply with legal requirements• Do more than legally required, e.g., philanthropy• Articulate social (CSR) objectives• Integrate social objectives and business goals• Lead the industry on social objectives

Responsibility

Societal Expectati

on

Examples

Economic Required Be profitable. Maximize sales, minimize costs, etc.

Legal Required Obey laws and regulations.

Ethical Expected Do what is right, fair and just.

Discretionary(Philanthropic)

Desired/Expected

Be a good corporate citizen.

Philanthropic ResponsibilitiesPhilanthropic ResponsibilitiesBe a good corporate citizen.

Ethical ResponsibilitiesEthical ResponsibilitiesBe ethical.

Legal ResponsibilitiesLegal ResponsibilitiesObey the law.

Economic ResponsibilitiesEconomic ResponsibilitiesBe profitable.

Pyramid of CSR

Corporate Social Responsibility (CSR)Arguments Against

• Restricts the free market goal of profit maximization

• Business is not equipped to handle social activities

• Dilutes the primary aim of business

• Increase business power

• Limits the ability to compete in a global marketplace

Corporate Social Responsibility (CSR)Arguments For

• Addresses social issues business caused and allows business to be part of the solution

• Protects business self-interest

• Limits future government intervention

• Addresses issues by using business resources and expertise

• Addresses issues by being proactive

Thank you for patiently listening

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