{"id":90866,"date":"2025-06-01T10:39:13","date_gmt":"2025-06-01T10:39:13","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=90866"},"modified":"2025-06-01T10:39:13","modified_gmt":"2025-06-01T10:39:13","slug":"fiscal-deficit-in-the-union-budget-means","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/fiscal-deficit-in-the-union-budget-means\/","title":{"rendered":"Fiscal deficit in the Union Budget means :"},"content":{"rendered":"

Fiscal deficit in the Union Budget means :<\/p>\n

[amp_mcq option1=”the difference between current expenditure and current revenue.” option2=”net increase in the borrowings of the Union Government from the Reserve Bank of India.” option3=”the sum of budgetary deficits and the net increase in internal and external borrowings.” option4=”None of the above” correct=”option3″]<\/p>\n

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This question was previously asked in<\/div>\n
UPSC CAPF – 2023<\/div>\n<\/div>\n
Download PDF<\/a>Attempt Online<\/a><\/div>\n<\/div>\n
Fiscal deficit represents the total borrowing requirement of the government. It is defined as the difference between the government’s total expenditure and its total receipts (excluding borrowings). This difference must be financed by borrowing from domestic sources (like the market, banks, public) and external sources. Therefore, the fiscal deficit is equal to the net increase in the government’s liabilities, which primarily comprises internal and external borrowings. Option C, despite potentially awkward phrasing (“sum of budgetary deficits and…”), is the only option that directly relates fiscal deficit to the total borrowing (net increase in internal and external borrowings) needed to finance the government’s gap. The magnitude of the fiscal deficit is precisely equal to the net increase in total borrowings (including other liabilities and accounting for cash balance changes, which are usually minor).<\/section>\n
Fiscal deficit is the difference between government spending and its revenue (excluding borrowings), representing the total amount the government needs to borrow. This borrowed amount is the net increase in its liabilities, including internal and external borrowings.<\/section>\n
Option A describes revenue deficit. Option B describes borrowing from the RBI, which is only one part of internal borrowing and not the definition of the entire fiscal deficit. The concept of “budgetary deficits” in Option C is confusing, but the latter part, “net increase in internal and external borrowings,” accurately reflects how the fiscal deficit is financed and its magnitude.<\/section>\n","protected":false},"excerpt":{"rendered":"

Fiscal deficit in the Union Budget means : [amp_mcq option1=”the difference between current expenditure and current revenue.” option2=”net increase in the borrowings of the Union Government from the Reserve Bank of India.” option3=”the sum of budgetary deficits and the net increase in internal and external borrowings.” option4=”None of the above” correct=”option3″] This question was previously … <\/p>\n

Detailed SolutionFiscal deficit in the Union Budget means :<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1085],"tags":[1105,1120,1196],"class_list":["post-90866","post","type-post","status-publish","format-standard","hentry","category-upsc-capf","tag-1105","tag-economic-development","tag-fiscal-policy-revenue","no-featured-image-padding"],"yoast_head":"\nFiscal deficit in the Union Budget means :<\/title>\n<meta name=\"description\" content=\"Fiscal deficit represents the total borrowing requirement of the government. It is defined as the difference between the government's total expenditure and its total receipts (excluding borrowings). This difference must be financed by borrowing from domestic sources (like the market, banks, public) and external sources. Therefore, the fiscal deficit is equal to the net increase in the government's liabilities, which primarily comprises internal and external borrowings. Option C, despite potentially awkward phrasing ("sum of budgetary deficits and..."), is the only option that directly relates fiscal deficit to the total borrowing (net increase in internal and external borrowings) needed to finance the government's gap. The magnitude of the fiscal deficit is precisely equal to the net increase in total borrowings (including other liabilities and accounting for cash balance changes, which are usually minor). Fiscal deficit is the difference between government spending and its revenue (excluding borrowings), representing the total amount the government needs to borrow. This borrowed amount is the net increase in its liabilities, including internal and external borrowings.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/fiscal-deficit-in-the-union-budget-means\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fiscal deficit in the Union Budget means :\" \/>\n<meta property=\"og:description\" content=\"Fiscal deficit represents the total borrowing requirement of the government. It is defined as the difference between the government's total expenditure and its total receipts (excluding borrowings). This difference must be financed by borrowing from domestic sources (like the market, banks, public) and external sources. Therefore, the fiscal deficit is equal to the net increase in the government's liabilities, which primarily comprises internal and external borrowings. Option C, despite potentially awkward phrasing ("sum of budgetary deficits and..."), is the only option that directly relates fiscal deficit to the total borrowing (net increase in internal and external borrowings) needed to finance the government's gap. The magnitude of the fiscal deficit is precisely equal to the net increase in total borrowings (including other liabilities and accounting for cash balance changes, which are usually minor). Fiscal deficit is the difference between government spending and its revenue (excluding borrowings), representing the total amount the government needs to borrow. 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It is defined as the difference between the government's total expenditure and its total receipts (excluding borrowings). This difference must be financed by borrowing from domestic sources (like the market, banks, public) and external sources. Therefore, the fiscal deficit is equal to the net increase in the government's liabilities, which primarily comprises internal and external borrowings. Option C, despite potentially awkward phrasing (\"sum of budgetary deficits and...\"), is the only option that directly relates fiscal deficit to the total borrowing (net increase in internal and external borrowings) needed to finance the government's gap. The magnitude of the fiscal deficit is precisely equal to the net increase in total borrowings (including other liabilities and accounting for cash balance changes, which are usually minor). 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Therefore, the fiscal deficit is equal to the net increase in the government's liabilities, which primarily comprises internal and external borrowings. Option C, despite potentially awkward phrasing (\"sum of budgetary deficits and...\"), is the only option that directly relates fiscal deficit to the total borrowing (net increase in internal and external borrowings) needed to finance the government's gap. The magnitude of the fiscal deficit is precisely equal to the net increase in total borrowings (including other liabilities and accounting for cash balance changes, which are usually minor). Fiscal deficit is the difference between government spending and its revenue (excluding borrowings), representing the total amount the government needs to borrow. 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