Fiscal Deficit

Context:  The government’s fiscal deficit as of end ­December touched 59.8% of the full year Budget Estimate (BE) on subdued growth in revenue collections, according to Finance Ministry data released. About the News:
  • In actual terms, the fiscal deficit — the difference between expenditure and revenue — was 9,92,976 crore during the April-­December period of 2022­-23.
  • In the corresponding period last year, the deficit stood at 50.4% of the BE of 2021­-22.
  • The Centre had budgeted fiscal deficit at ₹16.61 lakh crore, or 6.4% of the GDP, in the current financial year ending March 2023. The deficit is funded by market borrowing.
About Fiscal Deficit:
  • Fiscal deficit is defined as excess of total expenditure over total receipts excluding borrowings during a fiscal year.
  • It reflects the borrowing requirements of the government for financing the expenditure including interest payments.
    • Fiscal deficit = Revenue expenditure + capital expenditure – Revenue receipts – capital Receipts excluding borrowings.
  • It is an indicator of the increase in future liabilities of the government on interest payment and loan repayment.
Source: The Hindu

Leave a Comment