The Telegraph
Friday , July 11 , 2014
CIMA Gallary

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