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The term fiscal deficit means

  • A.Revenue receipts minus expenditure
  • B.Total receipts minus expenditure
  • C.Revenue receipts minus defence expenditure
  • D.Total receipts minus interest payments on external debt.

Answer: B

It is total receipts minus total expenditure, where receipts exclude borrowings.

\[\text{Fiscal deficit} = \text{Total expenditure} - (\text{Revenue receipts} + \text{Non-debt capital receipts})\] It measures the government's entire borrowing requirement for the year, and so its addition to the stock of public debt.

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