📚 Nagaland TET – General Awareness & Current Affairs
Topic: Budget & Banking
Prepared for: Nagaland Teacher Eligibility Test (TET) – General Awareness & Current Affairs Section
Date: 2026‑11‑05
Author: ChatGPT – Expert Teacher
1. Simple Explanation
| Term | What it Means | Why It Matters for Teachers |
|---|---|---|
| Budget | A financial plan prepared annually by the government. It outlines expected revenue (taxes, fees, etc.) and planned expenditure (health, education, infrastructure). | Teachers need to know how budgets affect school funding, teacher salaries, and educational schemes. |
| Banking | The system of financial institutions (banks) that accept deposits, provide loans, and offer payment services. | Teachers may need to manage money for school activities, apply for bank loans for school projects, and understand financial literacy for students. |
2. Key Points
A. Budget – Core Concepts
| # | Concept | Detail |
|---|---|---|
| 1 | Types of Budgets | • Revenue Budget – funds that come in (taxes, fees). • Capital Budget – funds for long‑term assets (infrastructure, equipment). |
| 2 | Components of the Budget | • Appropriation (allocation to each ministry). • Taxation (direct & indirect). • Public Debt (borrowing details). |
| 3 | Budget Cycle | 1️⃣ Drafting (July‑Sept) 2️⃣ Parliamentary approval (Oct‑Nov) 3️⃣ Implementation (Jan‑Dec) |
| 4 | Key Indicators | • GDP Growth • Fiscal Deficit (as % of GDP) • CPI (inflation) |
| 5 | Recent 2026 Highlights (India) | • FY 2026‑27: 3.5% fiscal deficit target. • Education: ₹70,000 crore for school infrastructure. • Digital India: ₹50,000 crore for digital learning. |
B. Banking – Core Concepts
| # | Concept | Detail |
|---|---|---|
| 1 | Types of Banks | • Commercial Banks (Punjab National Bank, State Bank of India). • Regional Rural Banks (RRBs) – e.g., Nagaland Rural Bank. • Cooperative Banks • Public Sector Banks (State Bank of India, Bank of Baroda). |
| 2 | Banking Services | • Deposits (current, savings). • Loans (term, working capital). • Payment Services (NEFT, RTGS, UPI, IMPS). |
| 3 | Digital Banking | • UPI – real‑time payments via mobile. • BHIM App. • e‑KYC for opening accounts. |
| 4 | Key RBI Regulations | • PRSP (Prudential Regulatory Standards for Public Sector Banks). • Reserve Requirement Ratio (RRR) – 4.5% (2026). • Banking Reforms – emphasis on financial inclusion. |
| 5 | Recent 2026 Developments | • Digital Payments – UPI transactions hit 4.5 billion in FY 2025‑26. • Rural Banking – RRBs to receive ₹1,000 crore for micro‑enterprise financing. • Micro‑Finance – state‑run NBFCs target ₹500 crore for micro‑loans in Nagaland. |
| 6 | Importance for Nagaland | • Micro‑finance & NBFIs support tribal entrepreneurship. • SBI & State Bank of India run “Education Loan” schemes for higher studies. • Nagaland Rural Bank focuses on agriculture & fisheries credit. |
C. How Budget & Banking Interact
| Interaction | Example |
|---|---|
| Government borrowing | Budget deficit financed through RBI‑issued bonds; banks purchase these bonds. |
| Education funding | Budget earmarks money → banks disburse loans to schools (e.g., “School Infrastructure Development Programme”). |
| Digital payments | Budget promotes digital literacy → RBI allows UPI for school fee payments. |
3. Worked Example
📌 Scenario
A government school in Nagaland receives a ₹2,000,000 allocation from the state budget for classroom renovation. The school needs to pay for materials and labour. The school’s finance officer decides to borrow the amount from a local Regional Rural Bank (RRB) and repay over 12 months at an annual interest rate of 8%.
| Step | Calculation | Result |
|---|---|---|
| 1️⃣ Monthly repayment | Using simple interest: [Interest = Principal × Rate × Time] (Interest = ₹2,000,000 × 8% × \frac{12}{12} = ₹160,000) Total amount to repay = ₹2,000,000 + ₹160,000 = ₹2,160,000 Monthly installment = ₹2,160,000 ÷ 12 = ₹180,000 |
|
| 2️⃣ Budget impact | The budget allocated ₹2,000,000. The repayment cost (₹160,000) is considered a non‑budgetary expense, i.e., it will come from the |