Question

A fiscal deficit is equal to borrowings. It is ______

Options

• False

• True

• Insufficient information

• None of the above

Answer 1

A fiscal deficit is equal to borrowings. It is True

Explanation:

Except for borrowings, the fiscal deficit is the difference between government expenditure and revenue. For example, if total expenditures are Rs 100 crores and total income is Rs 100 crores (including Rs 20 crores in borrowing),

then fiscal deficit = 100 − (100 − 20) = 20

As a result, we can observe that a budget deficit equals borrowings.