Budget, Balance of Payment, External Debt, Money & Banking
By Jaya MeraSkill.com
Budget and Fiscal Deficit
Govt Receipts & Expenditure
Meaning of Budget and Fiscal Deficit Budget = Expected receipts - Expenditure of govt Budget deficit = Total exp (capital +revenue)-Total receipt (capital +revenue) Fiscal deficit = Total exp (capital +revenue) - Total receipts (exl borrowings)
Fiscal deficit = Budget deficit +(borrowings + other liability) Budget deficit doesn’t give true picture of an economy Fiscal deficit is a more comprehensive measure Fiscal Policy
Trends in India’s budget & fiscal deficit 1975-1990 - Fiscal deficit rose alarmingly due to unchecked growth of non plan revenue expenditure 1991 - steps were taken to correct the fiscal imbalance 1997-98 - Fiscal Deficit again rose Fiscal Responsibility and Budget Management (FRBM)bill was introduced in 2000 and act was passed in 2003 Aims at reducing gross fiscal deficit by 0.5 % of the GDP in each financial year 2007-08 - It came down to 2.5%
Trends in India’s budget & fiscal deficit 2008-09 (6%) / 2009-10 (6.5%) - World wide financial crisis led to downturn in industry and services sectors. Required a fiscal impetus which led to an increase of fiscal deficit 2010-2011 - 4.8% due to partial roll back of the stimulus given 2013-14 - 4.5%
Quiz
______ is the difference between total receipts and total expenditure : (a) Fiscal Deficit (b) Budget Deficit (c) Revenue Deficit (d) Capital Deficit
______ is the difference between total receipts and total expenditure : (a) Fiscal Deficit (b) Budget Deficit (c) Revenue Deficit (d) Capital Deficit
Revenue deficit in India is: (a) Positive (b) Negative (c) Zero (d) Balanced
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