Which of the following is another term for 'Budgetary Deficit'?
Show answer & explanation
Correct answer: A
Explanation
Correct Answer:-
Fiscal Deficit
Explanation:-
In economics, a 'Budgetary Deficit' is a situation where the government's total expenditure exceeds its total receipts. In a broader sense, this difference is referred to as the Fiscal Deficit, which represents the total borrowing requirements of the government.
Key Points
Meaning of Budgetary Deficit: When the government's total spending is higher than its total income (tax and non-tax revenue), it is called a budgetary deficit.
Fiscal Deficit: This is an accurate measure of the government's total borrowing.
Other Types of Deficits:
Revenue Deficit: The difference between revenue receipts and revenue expenditure only.
Primary Deficit: The remainder after subtracting interest payments from the fiscal deficit.
Trade Deficit: When a country's imports exceed its exports.
Important Questions and Answers
Question: What is the main measure to reduce the budget deficit?
Answer: The primary measures to reduce the government deficit include increasing tax revenue, cutting unnecessary expenditures, and undertaking disinvestment in public sector enterprises.
Question: When was the Fiscal Responsibility and Budget Management (FRBM) Act implemented in India?
Answer: The FRBM Act was implemented in the year 2003, with the objective of ensuring fiscal discipline and controlling the deficit.