Case C5 – Explaining Current Account Deficit .
September 15, 2013 at 8:00pm
Case -Current Account Deficit
(Inputs By Chitlange sir )
You will often hear news -That the current account deficit for the government is growing —–let’s understand what this means ….The government has expenses in terms of finances to consider for it’s projects to undertake ….note that it has now food bill to undertake …..Similarly say it wants to set up industrial units to promote a particular segment or want toundertake infrastructure projects etc —–how does the government get’s it revenues —it is by way of taxes —the taxes you and i pay and the corporates pay is income tax and is called direct taxes ….other than direct taxes , the government also collects indirect taxes —which is by means of excise , CST , services , etc ….when good get imported , it collects custom , countervailing , special countervailing duty …..all the taxes combined(Both direct and indirect ) together constitute the revenue for the government ——When the expenses of the government outgrow the revenue in terms of tax collection , the account shows a deficit ——this is called current account deficit —- Hope the concept is cleared for once and all —-
Cheers -Amlan Dutta
(In the occean of knowledge , all the notes i write will dissappear with time and so to organise this lakes , i need to plan from now only so i put in well organised notes ,where each note should be going ….
Also i have 112 backup’s of my work , so don’t worry , i am here to stay )