Consumer buyers: Consumer buyers are those who purchase
items for their personal consumption
Consumer durables: Consumer durables have low volume but
high unit value. Consumer durables are often further divided into White goods
(e.g. fridge freezers; cookers; dishwashers; microwaves) and Brown goods (e.g.
DVD players; games consoles; personal computers)
Consumer markets: Consumer markets are the markets for
products and services bought by individuals for their own or family use
Consumer Price Index: It is a price index covering the
prices of consumer goods.
Consumer Price Index: It is a price index that features the
rates of consumer goods
Contingency Fund: It is more or less similar to that extra
little bit of savings that all mothers set aside in case of an emergency.
Likewise, the government has created this fund to help it tide over difficult
situations. The fund is at the disposal of the President to meet unforeseen and
urgent expenditure, pending approval from Parliament. The amount that is
withdrawn from the fund is recouped.
Continuous market research: Continuous
research involves interviewing the same sample of people, repeatedly
Core product: The set of problem-solving or need-meeting
benefits that customers are buying when they purchase a product. Customers are
rarely prepared to pay a premium for these elements of a product.
Countervailing Duties (CVD): This is levied on imports that
may lead to price rise in the domestic market. It is imposed with the intention
of discouraging unfair trading practices by other countries.
CRR means Cash Reserve Ratio. Banks in India are required to
hold a certain proportion of their deposits in the form of cash. However,
actually Banks don't hold these as cash with themselves, but deposit such case
with Reserve Bank of India (RBI)/ currency chests, which is considered as
equivalent to holding cash with RBI. This minimum ratio (that is the part of
the total deposits to be held as cash) is stipulated by the RBI and is known as
the CRR or Cash Reserve Ratio. Thus, when a bank's deposits increase by Rs 100,
and if the cash reserve ratio is 6%, the banks will have to hold additional Rs
6 with RBI and Bank will be able to use only Rs 94 for investments and lending/
credit purpose. Therefore, higher the ratio (i.e. CRR), the lower is the amount
that banks will be able to use for lending and investment. This power of RBI to
reduce the lendable amount by increasing the CRR, makes it an instrument in the
hands of a central bank through which it can control the amount that banks
lend. Thus, it is a tool used by RBI to control liquidity in the banking
system.
Current Account Deficit: This deficit shows the difference
between the nation's exports and imports.
Current Account Surplus: Excess of receipts over expenditure
on current account in a country's balance of payments.
Custom Duties: These duties are levied on goods whenever
they are either brought into the country or exported from the country. The
importer or the exporter pays custom duties.
Customer demand: Consumer demand is a want for a specific
product supported by an ability and willingness to pay for it.
Customer loyalty: Feelings or attitudes that incline a
customer either to return to a company, shop or outlet to purchase there again,
or else to re-purchase a particular product, service or brand.
Demand For Grants: It is a statement of estimate of
expenditure from the Consolidated Fund. This requires approval of the Lok
Sabha.
Direct marketing: The planned recording, analysis and
tracking of customer behaviour to develop a relational marketing strategies
Direct Taxes: Taxes paid directly by the person or
organisation on whom they are levied. Income Tax and Corporate Tax fall under
this tax category
Disinvestment: It is the dilution of government's stake in
Public Sector Undertakings.
Early adopters: People who choose new products carefully and
are often consulted by people from the remaining adopter categories
ECB: External Commercial Borrowing
E-commerce: The use of technologies such as the Internet,
electronic data exchange and industry extranets to streamline business
transactions
Endorsement: The promotion of some kind of product recommendation
or affirmation, usually from a celebrity, implying to the potential customer
that a product is good
ESPO: Employee Stock Option Loan
Excise duties: These duties refer to duties imposed on goods
manufactured within the country.
Finance Bill: It is the government's proposals for
imposition of new taxes, modification of the existing tax structure or
continuance of the existing tax structure beyond the period approved by
Parliament.
Fiscal Deficit: It is the difference between the Revenue
Receipts and Total Expenditure.
Fiscal Policy: Fiscal policy is a change in government
expenditure and/or taxation designed to influence economic activity. These
changes are designed to control the level of aggregate demand in the economy.
Governments usually bring about changes in taxation, volume of spending, and
size of the budget deficit or surplus to affect public expenditure.
FRBM Act: Enacted in 2003, the Fiscal Responsibility and
Budget Management Act required the elimination of revenue deficit by 2008-09.
This means that from 2008-09, the government was to meet all its revenue
expenditure from its revenue receipts. Any borrowing was to be done to meet
capital expenditure i.e. repayment of loans, lending and fresh investment. The
Act also mandates a 3% limit on the fiscal deficit after 2008-09; one that
allows the government to build capacities in the economy without compromising
on fiscal stability.
Fringe Benefit Tax (FBT): It is the tax levied on the
‘fringe benefit' / perks given by a company to its employees. Companies could
no longer get away with marking such expenses as ‘ordinary business expenses'
and escape tax when they actually gave out club memberships to their employees.
Employers had to now pay a tax (FBT) on a percentage of the expense incurred on
such perquisites. This tax was introduced in the 2005-06 budget.
Gender segmentation: The segmentation of markets based on
the sex of the customer. The cosmetic industry is a good example of widespread
use of gender segmentation, Geographic segmentation, Geographic segmentation
divides markets into different geographical units
Gross Domestic Product: Total market value of the goods and
services manufactured within the country in a financial year. GROSS NATIONAL
PRODUCT Total market value of the finished goods and services manufactured
within the country in a given financial year, plus income earned by the local
residents from investments made abroad, minus the income earned by foreigners
in the domestic market.
Growth stage: The stage at which a product's sales rise
rapidly and profits reach a
GST: A GST (Goods and Services Tax) contains the entire
element of tax borne by a good / service including a Central and a state-level
tax.
Income Tax: This is the tax levied on individual income from
various sources like salaries, investments, interest, etc.
Indirect Taxes: Taxes imposed on goods manufactured,
imported or exported such as Excise Duties and Custom Duties.
Inflation: A progressive increase in prices of goods and
services. It is the percentage rate of change in the price level. In inflation,
everything tends to appear more valuable except money.
Internal marketing: The process of eliciting support for a
company and its activities among its own employees, in order to encourage them
to promote its goals. This process can happen at a number of levels, from
increasing awareness of individual products or marketing campaigns, to
explaining overall business strategy.
Laggards: The group of consumers who are typically last to
buy a new product
Marginal Standing Facility Rate: Under this scheme,
Banks will be able to borrow upto 1% of their respective Net Demand and Time
Liabilities". The rate of interest on the amount accessed from this
facility will be 100 basis points (i.e. 1%) above the repo rate. This
scheme is likely to reduce volatility in the overnight rates and improve
monetary transmission.
Market segmentation: Segmentation involves subdividing
markets, channels or customers into groups with different needs, to deliver
tailored propositions which meet these needs as precisely as possible.
Market targeting: Market targeting is the process of
evaluating each market segment and selecting the most attractive segments to
enter with a particular product or product line.
Marketing: The all-embracing function that links the
business with customer needs and wants in order to get the right product to the
right place at the right time"
Minimum Alternate Tax (MAT): It's known that a company pays
tax on profits as per the Income-Tax Act. If a company's tax liability is less
than 10% of its profits, it has to pay a minimum alternate tax of 10% of the
book profits.
MODVAT: It stands for Modified Value Added Tax and is a way
of giving some relief to the final manufacturers of goods on Excise Duties
borne by their suppliers.
Monetized Deficit: Measures the level of support the RBI
provides to the Centre's borrowing program.
National Debt: Total outstanding borrowings of the central
government exchequer.
Non-Plan Expenditure: Expenses that don't form a part of the
government's five year plan. These expenses consist of Revenue and Capital
Expenditure on interest payments, Defense Expenditure, subsidies, postal
deficit, police, pensions, economic services, loans to public sector
enterprises and loans as well as grants to State governments, Union territories
and foreign governments.
Non-Tax Revenue: Any loan given to state governments, public
institutions, PSUs come with a price (interests) and forms the most important
receipts under this head apart from dividends and profits received from PSUs.
The government also earns from the various services including public services
it provides.
Peak Rate: it is the highest rate of Custom Duty applicable
on an item.
Per capita income: The national income of a country, or
region, divided by its population.
Performance Budget: it is a compilation of programs and
activities of different ministries and departments.
Plan Expenditure: Consists of both Revenue Expenditure and
Capital Expenditure of the Center on the Central Plan, Central Assistance to
States and Union Territories.
Plan Outlay: Plan Outlay is the amount for expenditure on
projects, schemes and programmes announced in the Plan. The money for the Plan
Outlay is raised through budgetary support and internal and extra-budgetary resources.
The budgetary support is also shown as plan expenditure in government accounts.
Primary Deficit: Fiscal Deficit minus Interest payments
Product life cycle: The course of a product's sales and
profitability over its lifetime. The model describes five stages, each of which
represents a different opportunity for the marketer: - Development,
Introduction, Growth, Maturity, Decline.
Product: A product is defined as anything that is capable of
satisfying customer
Progressive Tax Structure: a tax structure in which the
marginal tax rate increases as the level of income increases.
Promotion: One of the four "P's" of the marketing
mix. Promotion is all about
Proportional Tax: a tax taking the same percentage of income
regardless of the level of income.
Public Account: it is an account where money received
through transactions not relating to consolidated fund is kept.
Public Debt: The difference between borrowings and
repayments during the year is the net accretion to the public debt. Public debt
can be split into two heads, internal debt (money borrowed within the country)
and external debt (funds borrowed from non-Indian sources).
Regressive Tax: a tax in which the poor pay a larger
percentage of income than the rich. It is the opposite of Progressive Tax.
Repo (Repurchase) rate: It
is the rate at
which the RBI lends shot-term money to the banks against securities. When the
repo rate increases borrowing from RBI becomes more expensive. Therefore,
we can say that in case, RBI wants to make it more expensive for the
banks to borrow money, it increases the repo rate; similarly, if it wants to
make it cheaper for banks to borrow money, it reduces the repo rate.
Revenue budget: Consists of Revenue Receipts and Revenue
Expenditure of the government.
Revenue Deficit: It is the difference between Revenue
Expenditure and Revenue Receipts.
Revenue Surplus: Opposite of Revenue Deficit, it is the
excess of Revenue Receipts over Revenue Expenditure.
Reverse Repo rate is the rate at which banks park their
short-term excess liquidity with the RBI. The banks use this tool when
they feel that they are stuck with excess funds and are not able to invest
anywhere for reasonable returns. An increase in the reverse repo rate means
that the RBI is ready to borrow money from the banks at a higher rate of
interest. As a result, banks would prefer to keep more and more surplus funds
with RBI.
Revised Estimates: usually given in the following budget, it
is the difference between the Budget Estimates and the actual figures.
SEBI: Securities and Exchange Board of India
Securities Transaction Tax (STT): STT is a small tax you
need to pay on the total amount you pay or receive in a share deal. In the
2004-05 Budget, the government did away with the tax on profits earned on the
sale of shares held for over a year (known as long-term capital gains tax) and
replaced it with STT.
SLR: Statutory Liquidity Ratio. Every bank is required to
maintain at the close of business every day, a minimum proportion of their Net
Demand and Time Liabilities as liquid assets in the form of cash, gold and
un-encumbered approved securities. The ratio of liquid assets to demand and
time liabilities is known as Statutory Liquidity Ratio (SLR). RBI is
empowered to increase this ratio up to 40%. An increase in SLR also
restrict the bank's leverage position to pump more money into the economy
Special Economic Zone Scheme: A new export promotion scheme
entitled ‘Special Economic Zone' (SEZ) was introduced in the Export and Import
(EXIM) Policy which came into effect from 1.4.2000. The Scheme envisages a
simple and transparent policy and procedure for promotion of exports with
minimum paper work. The most important feature of the Scheme is that the SEZ
area is considered essentially as a foreign territory for the purposes of trade
operations, duties & tariffs. Therefore, goods supplied to SEZ from the
Domestic Tariff Area (DTA) are treated as deemed exports and goods brought from
SEZ to DTA are treated as imported goods.
Subsidies: Financial aid provided by the Center to
individuals or a group of individuals to be competitive. The grant of subsidies
is also aimed at improving their skills of those who benefit from the
subsidies.
Subvention: This is how a government bears the loss that
financial institutions incur when asked to give farmer loans below the market
rates.
Surcharge: This is an extra bit of 10% on the tax liability
that individuals pay for earning more than Rs. 10 lakh. Companies with revenue
of up to Rs. 1 crore are spared.
TRAI: Telecom Regulatory Authority of India
Treasury Bill (T-BILLS): These are bonds (debt securities)
with maturity of less than a year. These are issued to meet short-term
mismatches in receipts and expenditure.
VAT: This tax is based on the difference between the value
of output and the value of inputs used to produce it. The aim here is to tax a
firm only for the value it adds to the manufacturing inputs, and not the entire
input cost. Thus, VAT helps avoid a cascading of taxes as a product passes
through different stages of production/value addition.
Vote On Account: It is a sort of interim budget where the
government presents accounts required to keep the process on until the next
government takes over.
Ways And Means Advance (WMA): RBI is the banker for both
Central and State governments. Hence, it provides a breather to manage
mismatches in their receipts and payments in the form of ways and means
advances.
What is the Union Budget?: The Union Budget is the annual
report of India as a country. It contains the government of India's revenue and
expenditure for the end of a particular fiscal year, which runs from April 1 to
March 31. The Union 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.
Wholesale Price Index: Prices of goods that are dealt with
wholesale (mostly inputs to production, rather than finished commodities).
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