Borrowings in government budget shows ____________ deficit.
Answer & explanation
Correct answer: option 3
The correct answer is option (3) : Fiscal
Fiscal deficit: This is the most common term used to represent the gap between a government's total expenditures and its total revenue (excluding borrowings). When the government spends more than it collects in revenue, it needs to borrow money to finance the difference. This borrowing is reflected in the fiscal deficit.
Primary deficit: This refers to the fiscal deficit excluding the interest payments on government debt. It indicates the government's underlying spending habits without considering the burden of existing debt.
Revenue deficit: This is a narrower concept that focuses solely on the difference between revenue expenditure (day-to-day operational expenses) and revenue receipts. It doesn't consider capital expenditure or borrowing.
Secondary deficit: This term is not commonly used in standard government budgeting.