Question

Which of the following terms refers to the difference between the government’s total expenditure and its total receipts, excluding borrowing?

• A. Revenue deficit
• B. Fiscal deficit
• C. Primary deficit
• D. Interest deficit

Answer 1

The correct option is B Fiscal deficit

Fiscal deficit is the difference between the government’s total expenditure and its total receipts, excluding borrowing. Adding revenue receipts and non-debt creating capital receipts gives the total receipts. So, fiscal deficit is the excess of government expenditure over its revenue receipts and non-debt capital receipts.