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Fiscal deficit breaches annual target
Why is it in news?
- According to official data released, Union Government’s fiscal deficit widened to ₹53 lakh crore, at the end of October of the current fiscal.
- It is close to 120% of the annual budget estimate.
Details:
- The deficit widened mainly due to poor revenue realisation.
- The lockdown imposed to curb spread of the virus had significantly impacted business activities.
- The fiscal deficit or gap between the expenditure and revenue had breached the annual target in July this year.
More about Fiscal Deficit:
- It indicate the excess of government expenditure over receipts except borrowing.
- Fiscal deficit = Total Expenditure – Total Receipts except borrowings.
- Fiscal deficit represents the total borrowing requirements of the central government.
- It indicate the financial health of the budget and that of the government.
- Higher fiscal deficit becomes a matter of concern. On the other hand, a manageable fiscal deficit is a welcome sign.