Fiscal Deficit Explained: Meaning, Types, Process, and Risks
Fiscal deficit is one of the most watched indicators in macroeconomics because it tells us how much a government needs to finance when its spending exceeds its non-borrowed receipts. In plain terms, it shows the gap between what the government plans to spend and what it expects to collect from taxes and other normal sources in a year. Understanding fiscal deficit helps students, investors, businesses, and policymakers judge borrowing pressure, debt sustainability, inflation risk, and the likely path of public policy.