Question map
Not attempted Correct Incorrect ★ Bookmarked
Loading…
Q15 (IAS/1994) Economy › Government Finance & Budget › Fiscal deficit concepts Answer Verified

Fiscal deficit in the Union Budget means

Result
Your answer: —  Â·  Correct: A
Explanation

Fiscal deficit measures the government’s total borrowing requirement and is defined as total expenditure minus total receipts excluding borrowings. It therefore represents the amount the government must finance through borrowings from all sources (domestic and external) rather than being limited to revenue shortfalls or RBI accommodation [1]. Expressed operationally, fiscal deficit equals the budgetary (or budget) deficit plus the net increase in internal and external borrowings—i.e., the extra resources raised from markets and abroad to meet the gap. Several standard explanations of the Union Budget adopt this formulation and list the sum of budgetary deficit and net increase in borrowings as the fiscal deficit.

Sources

  1. [1] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > 4.5 Government Deficits > p. 153
How others answered
Each bar shows the % of students who chose that option. Green bar = correct answer, blue outline = your choice.
Community Performance
Out of everyone who attempted this question.
52%
got it right
✓ Thank you! We'll review this.

SIMILAR QUESTIONS

IAS · 1999 · Q100 Relevance score: 1.44

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 · 2002 · Q87 Relevance score: 0.98

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: 0.40

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

IAS · 2025 · Q61 Relevance score: 0.25

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.

CDS-I · 2013 · Q21 Relevance score: -0.39

The concept which tries to ascertain the actual deficit in the revenue account after adjusting for expenditure of capital nature is termed as—