The Centre achieved the fiscal deficit target of 3.9% of GDP in FY16, the Controller General of Accounts reported . The Centre’s fiscal deficit stood at Rs 5.32 lakh crore or 3.9% of GDP in FY16, marginally lower than the revised estimate (RE) of Rs 5.35 lakh crore.

CROSS REFRENCES

Fiscal deficit is when a government’s total expenditures exceed the revenue that it generates (excluding money from borrowings). The difference between total revenue and total expenditure of the government is termed as fiscal deficit. It is an indication of the total borrowings needed by the government. While calculating the total revenue, borrowings are not included. Generally fiscal deficit takes place either due to revenue deficit or a major hike in capital expenditure. Capital expenditure is incurred to create long-term assets such as factories, buildings and other development. A deficit is usually financed through borrowing from either the central bank of the country or raising money from capital markets by issuing different instruments like treasury bills and bonds.