Question

The Fiscal Deficit measures:

Options

• Only the gap between revenue expenditure and revenue receipts

• The total borrowing requirement of the government

• The excess of non-debt creating capital receipts over total expenditure

• The borrowing requirement excluding interest payments on past debt

Answer 1

The Fiscal Deficit measures the total borrowing requirement of the government — it equals total expenditure minus non-borrowed receipts (revenue receipts plus non-debt creating capital receipts). The option describing borrowing excluding interest payments refers to the Primary Deficit.