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Centre’s Fiscal Deficit : Report

Centre’s Fiscal Deficit : Report

The Centre’s fiscal deficit in the first four months of 2023-24 touched 33.9% of the full-year target.

  • In the Union Budget, the government projected to bring down the fiscal deficit to 5.9% of the gross domestic product (GDP) in the current FY.
  • The deficit was 6.4% of the GDP in 2022-23 against the earlier estimate of 6.71%.

Fiscal Deficit:

  • Fiscal deficit is the difference between the government’s total expenditure and its total revenue (excluding borrowings).
  • It is an indicator of the extent to which the government must borrow in order to finance its operations and is expressed as a percentage of the country’s GDP.
  • A high fiscal deficit can lead to inflation, devaluation of the currency and an increase in the debt burden.
  • While a lower fiscal deficit is seen as a positive sign of fiscal discipline and a healthy economy.