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This is the gap between the government's total spending and the sum of its revenue receipts and non-debt capital receipts. It represents the total amount of borrowed funds the government requires to meet its expenditures completely.

The Union Budget is India’s annual report as a country. It contains the government of India's revenue and expenditure for the end of a particular fiscal year, which runs from April 1 to March 31. The Union Budget is the most extensive account of the government's finances, in which revenues from all sources and expenses of all activities undertaken are aggregated. It comprises the revenue budget and the capital budget. It also contains estimates for the next fiscal year.

Direct tax is levied on individuals and corporations for incomes generated by them—for example, income tax and corporate tax.

Indirect tax is imposed on goods and services—for example, GST.

Deficit financing means generating funds to finance the deficit resulting from excess expenditure over revenue. The gap is being covered by borrowing from the public by the sale of bonds or by printing new money.

A dividend is a sum of money a company gives to its shareholders out of the profits earned. Dividend distribution tax is the tax levied on the dividend paid by a company to its shareholders. Dividend distribution tax is the tax levied on the dividend paid by a company to its shareholders. The provisions of DDT were introduced by the Finance Act 1997. Only a domestic company is liable and has to pay the tax even if it is not liable to pay any tax on its income.

The Capital budget is different from the revenue budget as its components are long-term. The capital budget consists of capital receipts and payments.

Capital receipts are government loans raised from the public, government borrowings from the Reserve Bank and treasury bills, loans received from foreign bodies and governments, divestment of equity holding in public sector enterprises, securities against small savings, state provident funds, and special deposits.

Capital payments are capital expenditures on the acquisition of assets like land, buildings, machinery, and equipment. Investments in shares, loans and advances granted by the central government to state and union territory governments, government companies, corporations and other parties.

Fiscal policy is government spending or taxing change designed to influence economic activity. These changes are designed to control the level of aggregate demand in the economy. Governments usually bring about changes in taxation, volume of spending, and size of the budget deficit or surplus to affect public expenditure.