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Shove then, push now

TT compares the new finance ministerís budget with those of Manmohan Singh and P. Chidambaram that paved the way for reforms and ushered in a new tax regime

• CAD: Current Account Deficit; it measures the difference between the inflow and outflow of capital on account of trade and all remittances

• WPI: Wholesale price index

• Import cover: Measures how many days of imports the current level of forex reserves will finance

• BIFR: Board for Industrial and Financial Reconstruction was set up in 1987; it serves as a sick bay for public and private companies. Companies are referred to it when their net worth is completely eroded i.e. accumulated losses exceed its paid-up capital plus free reserves.

• NHB: National Housing Bank

• MAT: Minimum Alternate Tax (MAT) is levied on book profits of a company. The concept was first introduced in assessment year 1988-89; Chidambaram honed it. The levy was introduced because a number of large companies were able to become zero-tax companies because of the concessions they received under tax laws. MAT is computed on the basis of the provisions of the Companies Act. It is currently levied at 18.5% of book profits.

• FERA: Foreign Exchange Regulation Act, 1973, which placed highly restrictive controls on capital outflows

 
 
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