Some Important terms related to Budget

Fiscal Deficit

Fiscal deficit is defined as the excess of government’s total expenditure over total receipts excluding borrowings during a fiscal year.  It is an indication of the total borrowings needed by the government.

Revenue Deficit

Revenue deficit is excess of total revenue expenditure of the government over its total revenue receipts. Revenue deficit arises when the government’s actual net receipts is lower than the projected receipts. On the contrary, if the actual receipts are higher than expected one, it is termed as revenue surplus.

Primary Deficit

Primary deficit is defined as fiscal deficit of current year minus interest payments on previous borrowings. In other words whereas fiscal deficit indicates borrowing requirement inclusive of interest payment, primary deficit indicates borrowing requirement exclusive of interest payment.

Interim Budget

It is prepared in case of special situations like elections, wars, natural calamities, etc. This is valid for only six months. In interim budget, revenues are not specified and only expenditures are specified for the financial year.

Gross Domestic Product (GDP)

Gross Domestic Product (GDP) is the monetary value of all finished goods and services produced within a country’s borders in specific time period, generally calculated on an annual basis.