Fiscal Deficit Reaches 103% – Burning Issues – Free PDF Download

What is fiscal deficit?

• The difference between total revenue and total expenditure of the government is called as fiscal deficit.

What do you mean by fiscal deficit at 5% of GDP?

• If the gap between the Centre’s expenditure and total income is Rs 10 lakh crore.
• And the country’s GDP is Rs 200 lakh crore,
• The fiscal deficit is 5% of the GDP.

How is Fiscal Deficit met?

• The government meets fiscal deficit by borrowing money.
• Thus,Total borrowing = Fiscal deficit in that year

• India’s fiscal deficit target estimated in the Union Budget 2020-21 was Rs 7.96 lakh crore, or 5% of the gross domestic product.
• India’s fiscal deficit reached Rs 8.21 lakh crore, or 103% of the budgeted estimate in the quarter ended June.
• Last year it was 77.8% for the same period.

So how much will be the fiscal deficit for FY21?

• Finance Ministry officials admit that the budget estimates no longer hold due to the pandemic and the nationwide lockdown.
• But the government is reluctant to issue fresh estimates for the year given the uncertainty around the trajectory of the pandemic or when it will end.

Latest Burning Issues | Free PDF

Sharing is caring!