Your personal data will be used to support your experience throughout this website, to manage access to your account, and for other purposes described in our privacy policy. Plan expenditure of the Government – This consists of all the expenditures incurred by the government to finance the planned development of India as well as the central government financial supports to the states for their plan requirements. For example, if the gap between the Centre’s expenditure and total income is Rs 5 lakh crore and the country’s GDP is Rs 200 lakh crore, the fiscal deficit is 2.5% of the GDP. Borrowings: internally from a commercial bank, or from external sources like the IMF, other governments, etc.
Revenue deficit = Total revenue expenditure – Total revenue receipts. google_ad_client: "ca-pub-4191125082999991", Deficit financing (that is, printing new currency): borrowing funds from RBI against its securities (so, RBI prints new currency). Capital Expenditures on Defence by the Government – This consists of all kinds of capital expenses to maintain the defence forces, the equipment purchased for them as well as the modernisation expenditures. Your email address will not be published. This equals the money the government needs to borrow during the year. It reflects the total government borrowings during a fiscal year. enable_page_level_ads: true x���r�F�]U��y$ �}T9ޒd��V����ʃ�� )�%��@'����9�(����H��g�us��� y���i���� _ή���g�O����|uW��]U�}�����"/������%9{�9&���o�G������$
Other receipts by the Government – This includes many long-term capital accruals to the government through the Provident Fund (PF), Postal Deposits, various small saving schemes (SSSs) and the government bonds sold to the public (as Indira Vikas Patra, Kisan Vikas Patra, Market Stabilisation Bond, etc.). Loan disbursals by the Government – The loans forwarded by the government might be internal (i.e., to the states, UTs, PSUs, FIs, etc.) Context: Former Economic Affairs Secretary S C Garg has stated that the true fiscal deficit for 2018-19 is 4.7%. It is a situation occurs when the government’s expenditure exceeds its income. Over 500,000 candidates apply each year and compete for less than a thousand seats. Generally fiscal deficit takes place either due to revenue deficit or a major hike in capital expenditure. %���� As per the technical definition, Fiscal Deficit = Budgetary Deficit + Borrowings and Other Liabilities of the government. Raj Malhotra's IAS Institute, First Floor, Dainik Bhaskar Building, Sector 25D, Chandigarh. <> #03, Valpra House, 1st Floor, 17th Main Rd, near KEB Office, Aicobo Nagar, 1st Stage, BTM Layout, Bengaluru, Karnataka 560068, © 2020. Disinvestment is selling off assets is another corrective measure to minimise revenue deficit.
In simple words, it is the amount of borrowing the government has to resort to meet its expenses. endobj
2. ( Nick Name is Gumnaam baba given by Aspirants) has now become a magnificent online Portal over 4 years that has strong reputation as Arora IAS where dreams of young minds are turned into reality and we are known to bring happiness to thousands of Civil Services Aspirants. Loan Recovery – The money the government had lent out in the past in India (states, UTs, PSUs, etc.) ©Copyright 2020 Raj IAS Academy All Rights Reserved. However, the fiscal deficit is seen in almost every economy while the fiscal surplus is quite rare. IAS aspirants must be aware of the meaning of fiscal deficit and also the difference between fiscal deficit and revenue deficit, and other concepts for the UPSC economy segment. Capital expenditure is incurred to create long-term assets like buildings, factories, infrastructure development, etc.
IAS aspirants must be aware of the meaning of fiscal deficit and also the difference between fiscal deficit and revenue deficit, and … Fiscal deficit is an important term frequently used in business news and is relevant for the civil services exam. 4 0 obj The deficit does not mean debt, which is an addition of annual deficits. A surplus arises if receipts are more than expenditure.
This difference is calculated both in absolute terms and also as a percentage of the Gross Domestic Product (GDP) of the country.
A fiscal deficit happens because of events like a major increase in capital expenditure or due to revenue deficit. Initiative that was started by Mr. Arora . This is to provide the basis for the assignment of some of the centre’s revenues to the state governments and provide medium-term direction on fiscal matters, as taxing capacity of the states are not necessarily proportionate with their spending responsibilities. Expenditure of Government – Revenue Expenditure, Capital Expenditure, Interest Payments, Grants-in-aid for creation of capital assets. All non-revenue receipts of a government are known as capital receipts. FD = Budget Expenditure – Budget Receipts (excluding borrowings), RD = Revenue expenditure –Revenue receipts.
Borrowings by the Government – This includes all long-term loans raised by the government inside the country (i.e., internal borrowings) and outside the country (i.e., external borrowings). 2 0 obj Which of the statements given above is/are correct ? CBSE Previous Year Question Papers Class 10, CBSE Previous Year Question Papers Class 12, NCERT Solutions Class 11 Business Studies, NCERT Solutions Class 12 Business Studies, NCERT Solutions Class 12 Accountancy Part 1, NCERT Solutions Class 12 Accountancy Part 2, NCERT Solutions For Class 6 Social Science, NCERT Solutions for Class 7 Social Science, NCERT Solutions for Class 8 Social Science, NCERT Solutions For Class 9 Social Science, NCERT Solutions For Class 9 Maths Chapter 1, NCERT Solutions For Class 9 Maths Chapter 2, NCERT Solutions For Class 9 Maths Chapter 3, NCERT Solutions For Class 9 Maths Chapter 4, NCERT Solutions For Class 9 Maths Chapter 5, NCERT Solutions For Class 9 Maths Chapter 6, NCERT Solutions For Class 9 Maths Chapter 7, NCERT Solutions For Class 9 Maths Chapter 8, NCERT Solutions For Class 9 Maths Chapter 9, NCERT Solutions For Class 9 Maths Chapter 10, NCERT Solutions For Class 9 Maths Chapter 11, NCERT Solutions For Class 9 Maths Chapter 12, NCERT Solutions For Class 9 Maths Chapter 13, NCERT Solutions For Class 9 Maths Chapter 14, NCERT Solutions For Class 9 Maths Chapter 15, NCERT Solutions for Class 9 Science Chapter 1, NCERT Solutions for Class 9 Science Chapter 2, NCERT Solutions for Class 9 Science Chapter 3, NCERT Solutions for Class 9 Science Chapter 4, NCERT Solutions for Class 9 Science Chapter 5, NCERT Solutions for Class 9 Science Chapter 6, NCERT Solutions for Class 9 Science Chapter 7, NCERT Solutions for Class 9 Science Chapter 8, NCERT Solutions for Class 9 Science Chapter 9, NCERT Solutions for Class 9 Science Chapter 10, NCERT Solutions for Class 9 Science Chapter 12, NCERT Solutions for Class 9 Science Chapter 11, NCERT Solutions for Class 9 Science Chapter 13, NCERT Solutions for Class 9 Science Chapter 14, NCERT Solutions for Class 9 Science Chapter 15, NCERT Solutions for Class 10 Social Science, NCERT Solutions for Class 10 Maths Chapter 1, NCERT Solutions for Class 10 Maths Chapter 2, NCERT Solutions for Class 10 Maths Chapter 3, NCERT Solutions for Class 10 Maths Chapter 4, NCERT Solutions for Class 10 Maths Chapter 5, NCERT Solutions for Class 10 Maths Chapter 6, NCERT Solutions for Class 10 Maths Chapter 7, NCERT Solutions for Class 10 Maths Chapter 8, NCERT Solutions for Class 10 Maths Chapter 9, NCERT Solutions for Class 10 Maths Chapter 10, NCERT Solutions for Class 10 Maths Chapter 11, NCERT Solutions for Class 10 Maths Chapter 12, NCERT Solutions for Class 10 Maths Chapter 13, NCERT Solutions for Class 10 Maths Chapter 14, NCERT Solutions for Class 10 Maths Chapter 15, NCERT Solutions for Class 10 Science Chapter 1, NCERT Solutions for Class 10 Science Chapter 2, NCERT Solutions for Class 10 Science Chapter 3, NCERT Solutions for Class 10 Science Chapter 4, NCERT Solutions for Class 10 Science Chapter 5, NCERT Solutions for Class 10 Science Chapter 6, NCERT Solutions for Class 10 Science Chapter 7, NCERT Solutions for Class 10 Science Chapter 8, NCERT Solutions for Class 10 Science Chapter 9, NCERT Solutions for Class 10 Science Chapter 10, NCERT Solutions for Class 10 Science Chapter 11, NCERT Solutions for Class 10 Science Chapter 12, NCERT Solutions for Class 10 Science Chapter 13, NCERT Solutions for Class 10 Science Chapter 14, NCERT Solutions for Class 10 Science Chapter 15, NCERT Solutions for Class 10 Science Chapter 16, Fiscal Responsibility and Budget Management Act, Important economic terms related to the Union Budget, UPSC Prelims 2020 Question Paper Download.
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