Q. Which among the following is a correct definition of fiscal deficit?
Answer: Excess of Govt.’s disbursement comprising current and capital expenditures over its current receipts
Notes: A fiscal deficit occurs when a government's total expenditures exceed its total revenues, excluding money from borrowings. It indicates the financial health of a government and its reliance on borrowing to meet its expenses. A persistent fiscal deficit can lead to increased public debt and may affect economic stability. In India, the fiscal deficit is a critical indicator monitored by the Reserve Bank of India and is often expressed as a percentage of GDP.