Which of the following are the components of Fiscal deficit 1 Governments net borrowing at home 2 Go...........

Economic Affairs Public Finance and Debt Management

Download Solution PDF

Which of the following are the components of Fiscal deficit?

1. Government's net borrowing at home.

2. Government's borrowing from abroad.

3. External Commercial Borrowings of private sector.

4. Government's borrowing from RBI.

Select the correct answer using the code given below

1 and 2 only

1, 2 and 4 only

1, 3 and 4 only

2 and 4 only

छोटे Courses बड़े Results

Master Public Finance and Debt Management

Prepare through Micro-courses

Try Now

Explanation:

1:Fiscal deficit is the difference between the government's total expenditure and its total receipts excluding borrowing.
2:Gross fiscal deficit = Total expenditure - (Revenue receipts + Non-debt creating capital receipts)
3:It indicates total borrowing requirements of the government from all sources.
4 Gross fiscal deficit= Net borrowing at home + Borrowing from RBI + Borrowing from abroad
5: Borrowings of private sector is not accounted in fiscal deficit.
6: Net borrowing at home includes that directly borrowed from the public through debt instruments (for example, the various small savings schemes) and indirectly from commercial banks through Statutory Liquidity Ratio (SLR).