Which of the following is the best indicator of the borrowings of the Government?

Correct option is C

The correct answer is (c) Fiscal deficit

• The Fiscal Deficit is the best indicator of the borrowings of the government. It represents the difference between the government's total expenditure and its total revenue, excluding borrowings.

• Fiscal deficit shows how much the government is borrowing from various sources (including the market and central bank) to finance its expenditures.

• A higher fiscal deficit indicates more borrowing by the government, which can lead to higher public debt.

Information Booster:

• The fiscal deficit is a key indicator in the Indian budget and plays an important role in determining the financial health of the government.

• A fiscal deficit exceeding certain limits can lead to inflationary pressures and concerns about public debt sustainability.

• Primary deficit is used as an indicator of fiscal discipline, while revenue deficit focuses on the government's current expenditure over its income.

Additional Information:

• The Fiscal Responsibility and Budget Management (FRBM) Act of 2003 set targets for reducing fiscal deficit to ensure sustainable government finances.

• The government aims to reduce its fiscal deficit over time to manage the debt burden and ensure economic stability.