Understanding India's Economy

The total rupee value of every final good and service produced inside India's borders in a year.

The rate at which the price of a fixed basket of everyday goods and services is rising, measured mainly through the Consumer Price Index.

The gap between what the government spends and what it earns, excluding borrowings — the amount it must borrow to make up the difference.

The government's annual financial statement — its complete plan for what it expects to earn and spend in the coming financial year.

The total amount the central government owes, measured against the size of the economy to judge whether that debt load is sustainable.

The shortfall when the government's day-to-day running costs exceed its regular income — meaning it's borrowing just to pay for consumption, not to build anything.

Direct tax is paid straight to the government by the person who bears its cost; indirect tax is collected by a seller and passed on inside the price of what you buy.

A single nationwide indirect tax that replaced a tangle of separate central and state taxes with one unified system, launched in July 2017.

The government selling part or all of its ownership stake in public sector companies, either to raise money or to exit businesses it no longer needs to run.

The total the government spends subsidising the price of essentials — mainly food, fertiliser and cooking gas — for consumers and farmers.

The law that legally binds the government to fiscal discipline — originally through deficit targets, now increasingly through a debt-to-GDP anchor.

The gap between what India pays the rest of the world and what it earns from it — and the complete ledger, the Balance of Payments, that this gap sits inside.

The rupee's exchange value against other currencies, and the stockpile of foreign currency, gold and other reserve assets the RBI holds to manage it.

The difference between what India sells abroad and what it buys from abroad — merchandise and services combined.

Foreign Direct Investment builds or buys a lasting stake in an Indian business; Foreign Portfolio Investment buys Indian stocks and bonds that can be sold and pulled out in minutes.

The total amount India — government, companies and banks combined — owes to foreign lenders, measured against the size of the economy.

An international reserve asset created by the IMF — not a currency you can spend directly, but a claim that member countries can convert into usable foreign currency.

The interest rate at which the RBI lends short-term money to commercial banks — the single lever it pulls hardest to manage inflation and growth.

Two RBI rules forcing banks to set aside a fixed share of every deposit — as cash with the RBI (CRR) or as safe liquid assets (SLR) — before they can lend the rest.

A loan where the borrower has stopped paying interest or principal for 90 days or more — a debt the bank can no longer count on as reliably generating income.

Different measures of how much money is circulating in the economy, ranging from the most instantly spendable to the broadest definition that includes fixed deposits.

The RBI's legal mandate to keep CPI inflation at 4%, within a tolerance band of 2% to 6% — formalised in 2016 and renewed every five years since.

A monthly survey of purchasing managers' order books, output and hiring plans, boiled into a single number — above 50 means expansion, below 50 means contraction.

Tracks month-to-month change in the physical volume of output from mining, manufacturing and electricity — purely quantity produced, with no prices involved.

The return investors demand to lend money to the Government of India for a fixed period — most commonly quoted for the 10-year bond — a real-time barometer of borrowing cost and market confidence.

An independent agency's letter-grade assessment of how likely a government is to repay its debt in full and on time.

The recurring but irregular pattern an economy moves through — expansion, peak, contraction, trough — with no fixed schedule or duration.

The share of the working-age labour force without a job but actively seeking one — measured in India through two genuinely different, both official, recall-window methodologies.