Fiscal Deficit

Fiscal deficit refers to the shortfall when a government’s total spending exceeds its revenue from taxes and other sources in a given year. Essentially, it indicates how much the government needs to borrow to cover its expenses. A moderate fiscal deficit can boost economic growth by funding infrastructure and public services. However, persistent high deficits may lead to increased debt and financial instability. Balancing revenue and expenditure is essential to maintain economic health, ensuring the government can meet its commitments without over-reliance on borrowing.