India's Fiscal Deficit Goes Beyond 135% Of Target Budget; What Does It Mean?
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India's fiscal deficit soared well past its targeted budget and stood at 135.1% in April-November. A high fiscal deficit is generally not good for the...
country and its citizens in the long run.

Here's what the fiscal deficit means and how it will impact you in the days to come.

What Is Fiscal Deficit And How Does It Affect You?

The government defined fiscal deficit as, "the excess of total disbursements from the Consolidated Fund of India, excluding repayment of the debt, over total receipts into the fund (excluding the debt receipts) during a financial year."

Simply put, the fiscal deficit is the difference between what the government earns, the total income of the government, and what it spends, its total expenditure. This means that the government is spending more money than it is earning, which needless to say, is not ideal.

A high deficit is not just potentially problematic for the government in the long run but also impacts the common citizen. Fiscal deficit adds to the national debt.

When the fiscal deficit reaches soaring heights like it is now, the government generally responds by cutting unnecessary spending and increasing taxes.

For instance, in 2020, in view of a high deficit, the government decided not to increase the allowance for pensioners. Moreover, several governments, like that of Telangana, were unable to pay their employees full…
Roshni Ramesan
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