The fiscal deficit is the difference between

total revenue and total expenditure

total imports and total exports

total investment and total savings

total debt and total assets

Answer is Right!

Answer is Wrong!

This question was previously asked in

UPSC Combined Section Officer – 2019-20

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Fiscal deficit is the difference between the government’s total expenditure and its total non-debt receipts (revenue receipts + non-debt capital receipts) in a financial year. It represents the total borrowing requirement of the government to cover its excess expenditure over its non-borrowing income. Option A, “total revenue and total expenditure,” while a simplified representation, captures the essence as the deficit (expenditure minus revenue) is the amount the government needs to borrow.

– Fiscal deficit indicates the government’s borrowing needs.
– It is calculated as Total Expenditure – (Revenue Receipts + Non-debt Capital Receipts).
– A high fiscal deficit can lead to increased government debt and potentially higher inflation.

Fiscal deficit is distinct from revenue deficit (Revenue Expenditure – Revenue Receipts) and primary deficit (Fiscal Deficit – Interest Payments). Managing the fiscal deficit is a key goal of fiscal policy.

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