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Fiscal deficit stood at 82.7% of the full-year target

  • Posted By
    10Pointer
  • Categories
    Economy
  • Published
    1st Apr, 2022

Context

As per the data released by the CAG, the fiscal deficit of the government stood at 82.7 % of the revised estimate for FY22, compared with 76% of the relevant revised estimate in the year-ago period.

Fiscal deficit

  • A fiscal deficit is defined as the difference between total revenue and total expenditure receipt of the government.
  • It indicates the total borrowing requirement of the government to fulfill expenditure need.

Fiscal deficit = Total expenditure - Total income availed by the government

  • It can be classified as 

Gross Fiscal deficit refers to the excess of total expenditure including loans net of recovery over revenue receipt and non-debt capital receipt.

On the other side Net Fiscal deficit is the gross fiscal deficit excluding the net lending of the government.

NFD = GFD - net lending of the government

  • The central government has increased the fiscal deficit target from 6.8 percent to 6.9 percent of GDP in view of the Covid-19 pandemic.

Fiscal deficit v/s Primary deficit

 Primary deficit refers to an amount of fiscal deficit excluding the interest payments.It can be calculated with the difference between the current year`s fiscal deficit and the interest paid on the borrowings

Primary deficit = Fiscal deficit - net interest payments by the government

It shows the borrowing requirement of the government excluding the interest payment.

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