Sourabh's Views

Reading time 3.30 min In this article, I am covering what a fiscal deficit is, the current position of the fiscal deficit, Why the fiscal deficit is decreasing, why there is a chance of an increase, and how to reduce the fiscal deficit, also called fiscal consolidation. Let us discuss these one by one. What is Fiscal Deficit  Fiscal Deficit is the difference between total expenditure and the Revenue Receipts (including Non-Debt Capital Receipts). FD is reflective of the total borrowing requirement of Government. Revenue Deficit refers to the excess of revenue expenditure over revenue receipts. Effective Revenue Deficit is the difference between Revenue Deficit and Grant-in-Aid for Creation of Capital Assets. Primary Deficit is measured as Fiscal Deficit less interest payments. Effective Capital Expenditure (Eff-Capex) refers to the sum of Capital Expenditure and Grants-in-Aid for the Creation of Capital Assets.. Fiscal deficit is usually presented as a percentage of th...