Budget 2018: Important terms you should know before listening to FM Arun Jaitley's budget speech

Narendra Modi Government is all set to table the Union Budget 2018 on February 1. And with experts from various sectors expressing what they think the Finance Minister will include in his Budget, the Budget is also in spotlight for being the first one after rolling out of the Goods and Services Tax. 

But before you understand in detail about the expectations, tax rates and sops, Finance Minister Arun Jaitley may have announced, we have listed out a detailed glossary of the terms he surely will use in his speech. 

Aggregate Demand: It is refer to the total number of goods and services demanded in an economy at a given period of time.

Capital Expenditure: The total amount of money spent by an economy on acquiring or maintaining fixed assets, such as land, buildings, and equipment.

It also compromises of loans and advances granted by the Central government to state and Union Territory governments, government companies, corporations and other parties.

Capital Receipts: Capital receipts are a non-recurring incoming cash flow, which leads to the creation of a liability (a debt to be paid in the future) and a decrease in company assets (resources that lead to capital gain).

The primary items under capital receipts are, market loans,borrowings by the government from the Reserve Bank of India (RBI) and other parties through sale of treasury bills; loans received from foreign governments and bodies;recoveries of loans granted by the union government to state governments, Union Territories and other parties.
Capital receipts also include the proceeds from disinvestment of government equity in public enterprises.

Balance of Payments:It is the difference between the demand for and supply of a country's currency in the foreign exchange market.

Balanced Budget: The Union Budget is in balance when current receipts are equal to current expenditure.

Corporate Tax: This refers to the total tax paid by the corporate firms on the incomes they earn. 

Direct Taxes: These are the taxes that are levied on the income and resources of individuals or organizations. They include income tax, corporate tax, capital gains tax, inheritance tax, and likewise. 

Indirect Taxes: These are the taxes paid by consumers when they buy goods and services. They include sales tax, excise and customs duties.

Disposable Income: Disposable income is the amount that left after subtraction of the income tax from the main income
Income minus income tax.

Excise Duties: These are levies paid by manufacturers on items manufactured within the country. Excise duty is normally been charged in the total amount of a product or service, that has to be paid by the consumer. 

Fiscal Deficit: A fiscal deficit occurs when a government's total expenditures exceed the revenue that it generates, excluding money from borrowings. 

Current Account Deficit: It is a trade measure that shows the value of a country’s imports of goods and services to be higher than the value of its exports.

Inflation: An increase in the general price level.

MAT: This is the Minimum Alternative Tax, a minimum tax that a company must pay, even if it is under zero tax limits.

Monetary Policy: This comprises actions taken by the central bank (the RBI) to change the supply of money and the interest rate, and hence affecting economic activity. 

National Debt: The amount of total outstanding borrowings of the central government exchequer. 

Peak Rate:This is the highest rate of customs duty applicable on an item.

Progressive Tax and Regressive Tax: A tax in which the rich pay a larger percentage of income than the poor, Regressive tax is the one under which the poor pay the largest percentage of the tax. 

Proportional Tax: A tax taking the same percentage of income regardless of the level of income.

Regressive Tax: A tax in which the poor pay a larger percentage of income than the rich. Contrast with Progressive Tax.

Revenue Budget: The Revenue Budget consists of revenue receipts of government and the expenditure met from these revenues.

Value-Added Tax (VAT): It is a tax on the value added to a product at each stage of distribution, so that inputs that go into making the product aren’t taxed more than once.