- The difference between total revenue and total expenditure of the government is termed as fiscal deficit.
- It is an indication of the total borrowings needed by the government.
- While calculating the total revenue, borrowings are not included.
- Generally, fiscal deficit takes place due to either revenue deficit or a major hike in capital expenditure.
- A deficit is usually financed through borrowing from either the Central Bank of the country or raising money from capital markets by issuing different instruments like treasury bills and bonds.
- A mismatch in the expected revenue and expenditure can result in revenue deficit.
- Revenue deficit arises when the government’s actual net receipts is lower than the projected receipts.
- A revenue deficit does not mean actual loss of revenue.
Showing posts with label expected revenue. Show all posts
Showing posts with label expected revenue. Show all posts
Thursday, November 19, 2009
Fiscal Deficit
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