Budget 2025: From Fiscal Deficit, Capex To Disinvestment, GDP — Key Terms To Know
Finance Minister Nirmala Sitharaman will present the Union Budget 2025 on Feb. 1, outlining tax policies, sector allocations and economic targets for the financial year ending March 2026.
The Union Budget 2025 will be presented in the Lok Sabha on Feb. 1 by Finance Minister Nirmala Sitharaman, who will outline the government's revenue and expenditure plans for the next financial year.
The Budget will cover allocations for different sectors, tax policies and economic targets. It will set the financial direction for the year ahead. The announcement will include estimates for government income, spending and growth projections. It may also introduce policy changes affecting businesses and individuals.
Here are key terms to understand before the budget presentation:
Fiscal Deficit
The gap between government spending and revenue, not counting borrowed funds. A higher fiscal deficit indicates more reliance on borrowing.
Revenue, Capital Expenditure
Revenue Expenditure: Recurring costs like salaries, interest payments and subsidies.
Capital Expenditure: Funds allocated for projects like infrastructure and assets creation.
Direct, Indirect Taxes
Direct Tax: Levied on individuals and businesses, including income tax and corporate tax.
Indirect Tax: Applied to goods and services, such as the GST and customs duty.
GST
The goods and services tax is a major source of government revenue. A tax system covering most goods and services, replacing multiple indirect levies.
Disinvestment
The government's process of selling its stake in public sector enterprises to generate funds.
Finance, Appropriation Bill
Finance Bill: Lays out taxation proposals for the year.
Appropriation Bill: Grants approval for government expenditure.
Public Debt
The total borrowings of the government from domestic and external sources.
Inflation, Deflation
Inflation: A rise in prices affecting purchasing power.
Deflation: A decline in prices that can slow economic activity.
GDP, Growth Rate
Gross Domestic Product: The total value of goods and services produced in a financial year.
Growth Rate: The percentage change in the GDP over a specific period.
Current Account Deficit
The CAD shortfall when a country’s import payments exceed export earnings, affecting foreign reserves and currency stability.
