The gap between the government's total expenditure and its total receipts excluding borrowings, which equals the amount the government must borrow in a year.
- Fiscal deficit equals total expenditure minus (revenue receipts plus non-debt capital receipts); it shows the total borrowing requirement.
- Revenue deficit is the shortfall on the revenue account alone (revenue expenditure minus revenue receipts).
- Primary deficit equals the fiscal deficit minus interest payments; it shows the current year's borrowing apart from past debt.
- The FRBM Act, 2003, set targets to contain the fiscal deficit (as a percentage of GDP); verify the latest target and outturn.
- Financed mainly by borrowing (market loans), which adds to the public debt; large deficits can fuel concept inflation.
The fiscal-versus-revenue-versus-primary-deficit distinction and the FRBM Act are core budget-and-fiscal-policy facts, often in matching form.
Fiscal deficit (total borrowing need) versus revenue deficit (revenue account only) versus primary deficit (fiscal deficit minus interest); fiscal deficit excludes borrowings on the receipts side.
Total spending minus receipts excluding borrowing; equals the year's borrowing need; capped under the FRBM Act, 2003.