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CSEET · Economic and Business Environment · Indian Union Budget

In the Indian Union Budget, the fiscal deficit is best described as:

Fiscal deficit is total expenditure minus total receipts excluding borrowings. It equals the amount the government must borrow in the year to meet its spending, so it measures the net borrowing requirement of the Union Government.

  1. ATotal expenditure minus total receipts excluding borrowingsCorrect
  2. BRevenue expenditure minus revenue receipts
  3. CFiscal deficit minus interest payments
  4. DCapital expenditure minus capital receipts

Explanation

Fiscal deficit equals total expenditure less revenue receipts and non-debt capital receipts, which means total expenditure minus all receipts excluding borrowings. It therefore shows the government's net borrowing requirement. Revenue expenditure minus revenue receipts is the revenue deficit, and fiscal deficit minus interest payments is the primary deficit.

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