The 14th FC recommended 42%. The 15th FC adjusted this to 41%, accounting for the reorganization of the state of Jammu & Kashmir into two Union Territories (J&K and Ladakh), which are now funded by the Centre.

The GST Council, a constitutional body (Article 279A), is chaired by the Union Finance Minister. It includes the Union Minister of State for Finance and Finance Ministers of all States.

The automatic monetization of the fiscal deficit through the issuance of ad-hoc Treasury Bills to the RBI was abolished to check inflation and ensure RBI autonomy. It was replaced by Ways and Means Advances (WMA).

**Transfer Payments** involve the government giving money to individuals (like pensions, scholarships, subsidies) without receiving any goods or services in return. Since these payments do not create any physical or financial asset for the government and do not reduce any liability, they are strictly classified as **Revenue Expenditure**. They are essentially redistribution of income.

**Disinvestment** is the specific term used for the government action of selling or liquidating its assets, usually shareholding in Central Public Sector Enterprises (CPSEs). When the government sells a minority stake (less than 50%) but retains control, it is disinvestment. If it sells a majority stake and transfers control to a private entity, it becomes **Strategic Disinvestment** or Privatization. All disinvestment proceeds are treated as Capital Receipts.

**Corporate Tax** (or Corporation Tax) is a direct tax imposed on the net income or profit of corporate entities (companies). It is one of the largest sources of revenue for the Central Government in India. Unlike Income Tax (levied on individuals) or GST (levied on supply of goods/services), Corporate Tax specifically targets the earnings of businesses.

This is the technical definition of **Fiscal Deficit**. Formula: Fiscal Deficit = Total Expenditure - (Revenue Receipts + Non-Debt Capital Receipts). Non-debt capital receipts include recovery of loans and disinvestment proceeds. The Fiscal Deficit represents the **total borrowing requirement** of the government from all sources to bridge the gap between its spending and its non-borrowed income.

In economics, variables are classified as Stock or Flow. A **Stock** variable is measured **at a specific point in time** (e.g., Wealth, Public Debt, Money Supply as on 31st March). In contrast, a **Flow** variable is measured **over a period of time** (e.g., GDP, Income, Deficit during the year 2023-24). Understanding this distinction is fundamental to fiscal and monetary analysis.

Tax Buoyancy explains the relationship between the changes in the government's tax revenue growth and the changes in GDP. A buoyancy greater than 1 implies that tax revenues are growing faster than the GDP (economy), indicating a robust and efficient tax system. It accounts for both automatic growth in revenue due to economic growth and discretionary changes in tax policies.

When the government borrows heavily from the market to fund its deficit, it competes with the private sector for limited funds. This increased demand for loanable funds drives up interest rates (cost of borrowing), making it expensive for private companies to invest, thus "crowding them out" of the market.

A Cess (e.g., Health and Education Cess) is levied for a specific predetermined purpose and cannot be used for anything else. A Surcharge is an additional charge on tax for general revenue purposes. Crucially, proceeds from both Cess and Surcharge are NOT shared with state governments (they are not part of the divisible pool).

The 101st Constitution Amendment Act, 2016 inserted Article 279A, empowering the President to constitute the GST Council, which is the governing body for GST implementation.

Primary Deficit = Fiscal Deficit - Interest Payments. It shows how much the government needs to borrow to meet its current year's expenses, excluding the obligation of interest on old loans.