Question

Borrowing in government budget is__________.

• A. Revenue deficit
• B. Fiscal deficit
• C. Primary deficit
• D. Deficit in taxes

Answer 1

Answer: (B)

Fiscal deficit

Fiscal deficit, estimated as the difference between total expenditure and total receipts, is often termed as gross fiscal deficit. As there are three sources of borrowing for the government, gross fiscal deficit is also estimated as the sum total of borrowing from RBI, borrowing from abroad and net borrowing at home. Hence, borrowings are equivalent to fiscal deficit.