What is Fiscal Deficit?

Fiscal Deficit:

• Definition: Difference between government's total expenditure and its total non-borrowed receipts (Revenue Receipts + Capital Receipts excluding borrowings).
• Formula: Fiscal Deficit = Total Expenditure − (Revenue Receipts + Capital Receipts excluding Borrowings).
• Significance: Indicates total borrowing requirements of the government from market and RBI. Controlled under FRBM Act target (3% of GDP).