07-02-2013, 10:49 AM
DIFFERENCE BETWEEN BUDGET DEFICIT AND FISCAL DEFICIT
DIFFERENCE BETWEEN BUDGET .pptx (Size: 79.01 KB / Downloads: 35)
The Budget DAeficit
A government’s budget deficit is the difference between what it spends (G) and what it collects in taxes (T) in a given period:
If G exceeds T, the government must borrow from the public to finance the deficit. It does so by selling Treasury bonds and bills.
Fiscal deficit
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
The deficit can be financed by borrowing from the Reserve Bank of India (which is also called deficit financing or money creation) and market borrowing (from the money market, that is mainly from banks).