Fiscal Deficit Visualizer
Understand the gap between India's total revenue and total expenditure. Track the glide path of fiscal consolidation and its implications for growth.
What is Fiscal Deficit?
Fiscal deficit is the difference between the government's total expenditure and its total receipts (excluding borrowings). It indicates the amount of money the government needs to borrow to meet its expenses.
Formula
Fiscal Deficit as % of GDP
The sharp spike in **2020-21 (9.2%)** was due to the COVID-19 pandemic relief measures. The government is currently on a glide path to bring it below **4.5% by 2025-26**.
Types of Deficits
Revenue Deficit
Occurs when revenue expenditure exceeds revenue receipts. It means the government is borrowing to pay for day-to-day consumption.
Primary Deficit
Fiscal Deficit minus Interest Payments. It shows how much the government needs to borrow to meet expenses excluding previous debt obligations.
Why it matters for India?
Growth Multiplier
Controlled deficit allows the government to spend on infrastructure without causing runaway inflation or high debt interest.
Credit Rating
Global rating agencies look at India's fiscal deficit to decide the country's sovereign credit rating, affecting foreign investment.