Economics • Indian EconomyEasy
Which of the following best describes 'Fiscal Deficit' in the Union Budget of India?
A. The excess of total government expenditure over total non-debt receipts in a fiscal year✓ Correct Answer
B. The difference between revenue expenditure and revenue receipts
C. The total borrowings taken by the government from international financial institutions
D. The net addition to public debt after adjusting for interest payments on past loans
💡 Solution & Explanation
Fiscal deficit measures the exact shortfall where total government expenditure exceeds total non-debt receipts, representing the total net borrowing requirement of the government during a fiscal year. It excludes debt receipts like market borrowings and treasury bills from the revenue and capital receipt calculations. Managing fiscal deficit is crucial for controlling inflation and macroeconomic stability.
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