Economics • Indian EconomyMedium
What does the term 'Fiscal Deficit' represent in the context of the Union Budget of India?
A. The excess of total government expenditure over total non debt receipts in a financial year✓ Correct Answer
B. The difference between total revenue receipts and total revenue expenditure
C. The net interest payments owed by the central government on domestic public debt
D. The surplus generated from public sector undertaking dividend transfers
💡 Solution & Explanation
Fiscal deficit measures the total borrowing requirement of the government, representing the excess of total expenditure over total receipts excluding borrowings. Revenue deficit measures the shortfall of current revenue receipts compared to current revenue expenditures. Primary deficit is calculated by deducting net interest liabilities from the overall fiscal deficit. Monitoring fiscal deficit is crucial for macroeconomic stability and debt sustainability under the Fiscal Responsibility and Budget Management framework.
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