What is Fiscal Deficit? When the government’s expenditure is more than the income, this is called as the fiscal deficit. Government’s income includes the taxes, duties, sales of shares in the public sector companies, auction of public resources like spectrum, coal blocks, etc. The expenses include salaries for public sector employees, pension for retired employees, national security, subsidy for fuel and fertilizers, etc. These are only the sample and the actual list will be huge. A continuous high fiscal deficit is not a good sign for the economy. Normally the accepted fiscal deficit is denoted as 4-5% of our Gross Domestic Product (GDP). In the current fiscal year, it cross the 5.3% level. For the last couple of years, fiscal deficit keeps climbing to the new level which is not good for the country. It shows our govt. is not able to stimulate the economic growth and we are more depend on the import which would cause steep price increase and end up in the high inflation.
Posted on: Fri, 12 Jul 2013 12:36:36 +0000
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