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4.2. Fiscal Deficit

Fiscal deficit is the difference between the government’s total expenditure and its total receipts excluding borrowing

 

Gross fiscal deficit = Total expenditure – (Revenue receipts + Non-debt creating capital receipts)The fiscal deficit will have to be financed through borrowing. Thus, it indicates the total borrowing requirements of the government from all sources. From the financing sideFiscal Deficit = Revenue Deficit + Capital Expenditure - non-debt creating capital receipts

  

 

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