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Question
Define fiscal deficit.
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Solution 1
The fiscal deficit is the excess of total expenditure, i.e. revenue and capital expenditure, over total receipts. This measure reflects total borrowings of the government during the financial year.
Solution 2
Fiscal deficit refers to the excess of total expenditure over total receipts, excluding borrowings, during the given fiscal year.
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| (i) | Revenue Receipts | 20 |
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| (iii) | Revenue Deficit | 10 |
| (iv) | Non-debt creating capital receipts | 50% of revenue receipts |
| (v) | Interest Payments | 4 |
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