Economics • Indian EconomyMedium
What does 'Fiscal Deficit' represent in the context of government finances and budgetary management in India?
A. The excess of total government expenditure over total non-debt receipts during a financial year✓ Correct Answer
B. The difference between revenue expenditure and revenue receipts of the central government
C. The total amount of interest payments owed by the government on past domestic borrowings
D. The net foreign exchange reserves held by the central bank to support import payments
💡 Solution & Explanation
Fiscal deficit measures the excess of total government expenditure over total non-debt receipts, indicating the total borrowing requirements of the government from all sources during a financial year. A lower fiscal deficit reflects macroeconomic prudence and fiscal discipline. Revenue deficit focuses strictly on the shortfall of revenue receipts compared to revenue expenditures.
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