Economics • Indian EconomyMedium
What does the term 'Fiscal Deficit' represent in the Union Budget of India?
A. The difference between total revenue receipts and total revenue expenditure
B. The excess of total government expenditure over total receipts excluding borrowings✓ Correct Answer
C. The net borrowing requirement of the government from external multilateral agencies only
D. The gap between total tax collections and interest payments on past debt
💡 Solution & Explanation
Fiscal deficit measures the excess of total government expenditure over total non-debt receipts, indicating the absolute borrowing requirements of the government during a specific financial year. It differs from revenue deficit, which exclusively compares revenue receipts against revenue expenditures without factoring in capital outlays or loans. Monitoring this fiscal indicator helps policymakers assess macroeconomic stability and overall government indebtedness.
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