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Q110 (CAPF/2023) Economy › Government Finance & Budget › Fiscal deficit concepts

Fiscal deficit in the Union Budget means:

Result
Your answer: —  Â·  Correct: C
Explanation

Fiscal deficit represents the total borrowing requirement of the government to bridge the gap between its total expenditure and its total non-debt receipts [1]. It is a comprehensive measure of fiscal health that indicates the actual liability of the government at a specific point in time [2]. Formally, it is defined as the sum of the budgetary deficit (which historically represented borrowings from the Reserve Bank of India) and the net increase in internal and external market borrowings and other liabilities [2][3]. While the specific term 'budgetary deficit' was largely discontinued as a primary policy parameter in 1997, the fiscal deficit remains the key indicator of the government's total reliance on borrowed funds from all sources, including domestic debt securities and external loans, to finance its operations [1][3]. This distinguishes it from the revenue deficit, which only considers current expenditure and revenue.

Sources

  1. [1] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > 4.5 Government Deficits > p. 153
  2. [2] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > N. Fiscal Deficit > p. 110
  3. [3] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > 2. I. Budget Deficit (or Government Deficit) > p. 109
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SIMILAR QUESTIONS

IAS · 1994 · Q15 Relevance score: 7.43

Fiscal deficit in the Union Budget means

IAS · 1999 · Q100 Relevance score: 1.40

Assertion (A) : Fiscal deficit is greater than budgetary deficit. Reason (R) : Fiscal deficit is the borrowings from the Reserve Bank of India plus other liabilities of the Government to meet its expenditure.

IAS · 2025 · Q61 Relevance score: 1.12

Suppose the revenue expenditure is ₹ 80,000 crores and the revenue receipts of the Government are ₹ 60,000 crores. The Government budget also shows borrowings of ₹ 10,000 crores and interest payments of ₹6,000 crores. Which of the following statements are correct? I. Revenue deficit is ₹ 20,000 crores. II. Fiscal deficit is ₹ 10,000 crores. III. Primary deficit is ₹ 4,000 crores. Select the correct answer using the code given below.

IAS · 2002 · Q87 Relevance score: 0.69

With reference to the Indian Public Finance consider the following statements: 1. External liabilities reported in Union Budget are based on historical exchange rates 2. The continued high borrowing has kept the real interest rates high in the economy 3. The upward trend in the ratio of Fiscal Deficit to GDP in recent years has an adverse effect to private investments. 4. Interest payments is the single largest component of the non-plan revenue expenditure of the Union Government. Which of these statements are correct ?

CDS-I · 2021 · Q34 Relevance score: -0.20

The excess of total expenditure of Government over its total receipts, excluding borrowings, is known as