Read here the important Marketing terms which we have jotted down keeping in mind their importance for the upcoming IBPS PO Exam scheduled to be conducted on 17 June 2012
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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