Question : Which of the following expressions is correct regarding the Gross fiscal deficit?
Option 1: Gross fiscal deficit = Net borrowing at home - Borrowing from RBI + Borrowing from abroad
Option 2: Gross fiscal deficit = Net borrowing at home + Borrowing from RBI + Borrowing from abroad
Option 3: Gross Fiscal deficit = Net borrowing at home + Borrowing from RBI - Borrowing from abroad
Option 4: Gross fiscal deficit = Net borrowing at home - Borrowing from RBI - Borrowing from abroad
Correct Answer: Gross fiscal deficit = Net borrowing at home + Borrowing from RBI + Borrowing from abroad
Solution : The correct option is Gross fiscal deficit = Net borrowing at home + Borrowing from RBI + Borrowing from abroad.
This measure reflects the shortfall of the government's total spending compared to its total revenue, excluding borrowings. It is used to assess a government's fiscal responsibility, and its ability to meet its financial obligations.
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