Budget 2021 | From Fiscal Deficit to Cess, a Glossary of Words to Decode FM’s Speech


New Delhi: Union Finance Minister Nirmala Sitharaman will unveil the Budget 2021 on February 1, Monday. However, unlike the past, the voluminous Budget documents will not be printed this year following the COVID-19 protocol and will instead be distributed electronically to the Members of Parliament (MPs). Also Read – BUDGET 2021 Expectations LIVE: What Common People, Economists And Market Experts Expect From Govt

The upcoming budget is highly anticipated among salaried/middle-class as scores of them lost their jobs and had to undergo salary cuts due to the pandemic. Sources have claimed that the upcoming Budget may have sops announced earlier under the Atmanirbhar Bharat package to help people in their fight against the Covid-19 pandemic. Also Read – PM Modi to Chair All-Party Meet Today, to Put Forth Govt’s Agenda for Budget Session

Here we have decoded the most-used terms that FM might use during the presentation of Budget 2021:  Also Read – Expectations From Defence Budget 2021-22: What Our Armed Forces Need

1. Fiscal Deficit: The condition when the government’s total income (total taxes and non-debt capital receipts) exceeds its revenue in a year. It is calculated both in absolute terms and as a percentage of the country’s gross domestic product (GDP).

2. Primary Deficit:  The difference between the current year’s fiscal deficit and interest payment on previous borrowings is known as Primary Deficit. Primary deficit = Gross fiscal deficit – Interest liability

3. Gross Domestic Product (GDP): Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced in a specific time period. GDP is the sum of the market values, or prices, of all final goods and services produced in an economy during a period of time.

4. Budget Estimates: The funds allocated for various jobs and activities and ministries for the coming financial year are called Budget estimates.

5. Cess: Commonly it is referred to as a tax on tax. A form of tax charged/levied over and above the base tax liability of a taxpayer is termed as Cess.

6. Corporate Tax: Direct tax imposed by a jurisdiction on the income or capital of corporations or analogous legal entities is Corporate Tax.

7. Repo Rate: The rate at which Reserve Bank of India (RBI) lends money to banks is called Repo Rate.

8. Minimum Alternative Tax (MAT): When a company has to pay a minimum amount of tax to the government, even if it is under zero tax limits, then that amount is called MAT.


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