Economics • Indian EconomyMedium
What does the term 'Fiscal Deficit' precisely represent in the context of the Union Budget of India?
A. The excess of total government expenditures over total non-debt receipts, indicating the total borrowing requirement of the government✓ Correct Answer
B. The difference between revenue expenditures and revenue receipts, excluding capital investments
C. The total accumulated public debt owed to foreign international financial institutions
D. The net loss incurred by public sector undertakings during a financial year
💡 Solution & Explanation
Fiscal deficit measures the gap between total government expenditure and the sum of revenue receipts and non-debt capital receipts, representing the total borrowing requirement of the government from all sources during the fiscal year. Revenue deficit specifically isolates the shortfall of revenue receipts over revenue expenditures. Public debt represents accumulated past deficits rather than the annual flow. Public sector enterprise losses are accounted for through internal enterprise budgets.
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