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.
- 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.