SSC Selection Post 2025 PYQ — Question 4

Correct Answer

Rs. 25 lakh crore

Explanation

The Fiscal Deficit is the difference between the government's total expenditure and its total revenue receipts (excluding borrowings). It represents the total amount of money the government needs to borrow to finance its operations. The formula is Fiscal Deficit = Total Expenditure - Total Revenue Receipts. Given that total expenditure is Rs. 75 lakh crore and total revenue receipts are Rs. 50 lakh crore, the fiscal deficit is calculated as 75 - 50 = 25 lakh crore rupees. While borrowing is mentioned as Rs. 20 lakh crore, the calculated deficit based on expenditure and revenue is the standard measure of the government's fiscal gap in this budgetary context.

Key Points

Fiscal Health: The fiscal deficit is a primary indicator of a government's financial stability and management efficiency.

Borrowing Requirement: It directly quantifies the amount of additional funds the government must source from external or domestic markets to balance its books.

Economic Impact: A consistently high fiscal deficit may lead to increased national debt, potential inflation, and reduced availability of credit for the private sector.

Important Questions and Answers

Question: What does a fiscal deficit of zero imply?

Answer: A zero fiscal deficit means the government's total expenditure is perfectly covered by its revenue, requiring no additional borrowing.

Question: How does the fiscal deficit differ from the budget deficit?

Answer: A budget deficit is the broader difference between all outflows and inflows, whereas the fiscal deficit specifically highlights the total borrowing requirement of the government.