Q. 205.0( 1 Vote )

Which of the foll

Answer :

Borrowing by a government represents a situation of fiscal deficit.


Explanation.


The fiscal deficit is the difference between the total expenditure of the government and the revenue receipt plus those capital receipts which are not in the nature of borrowings but which finally accrue to the government. The fiscal deficit can also be considered as budgetary deficit plus borrowing and other liabilities. A fiscal deficit indicates the amount of borrowing the government has to repay.


Fiscal Deficit = Revenue receipt + Capital Receipt – Total Expenditure.


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