Highlights

  • The difference between the government's income and its total spending is fiscal deficit
  • A deficit is mostly covered by obtaining funds through borrowing from the central bank

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Budget 2024: What does the term fiscal deficit mean?

The revenue, generated from avenues like taxes and earnings from state-owned enterprises, is distributed across diverse sectors. These include infrastructure development, employee salaries, interest payments, and administrative costs

Budget 2024: What does the term fiscal deficit mean?

Fiscal Deficit: What exactly is fiscal deficit, and why does it matter? At its core, fiscal deficit represents the difference between the government's income (revenue) and its total spending.

Budget 2024: Fiscal Deficit Explained in Simple Terms

Picture it as a financial seesaw – when the government ends up spending more than it earns, the result is a fiscal deficit.

The income, derived from sources like taxes and profits from state-owned enterprises, is allocated to various sectors such as infrastructure, employee salaries, interest payments, and administrative costs all contribute to it.

Typically, a deficit is covered by obtaining funds either through borrowing from the central bank of the nation or by securing capital from financial markets through the issuance of various instruments such as treasury bills and bonds.

Also Read: Budget 2024: Women entrepreneurs' expectations from FM Nirmala Sitharaman


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