Reviewed by Anjaneyulu | Updated on Sep 28, 2020


In simple terms, a deficit means an amount by which a sum falls short of some reference amount. A deficit is an amount by which one resource, especially money, falls short of what is required. If expenditures exceed income, imports exceed exports, or liabilities exceed assets, a deficit exists. A deficiency or loss is synonymous with a deficit, and it is the opposite of a surplus.

The cumulative negative amounts in a deficit are higher than the total positive amounts. In other words, money outflows exceed fund inflows. A deficit can occur when a government, corporation, or person spends more than earned in a given period, which is usually a year.

Types of Deficits in India

The following are the various types of deficits and the way to arrive at them.

  1. Budget deficit: Total expenditure as reduced by total receipts
  2. Revenue deficit: Revenue expenditure as reduced by revenue receipts.
  3. Fiscal Deficit: Total expenditure as reduced by total receipts except borrowings.
  4. Primary Deficit: Fiscal deficit as reduced by interest payments.
  5. Effective Revenue Deficit: Revenue deficit as reduced by grants for the creation of capital assets.
  6. Monetized Fiscal Deficit: The part of the fiscal deficit which is covered by the borrowing from the RBI.

Latest News

In India, the revenue deficit was targeted at 2.3% of GDP, and the fiscal deficit was targeted at 3.3% of GDP for the FY 2019-20. The target for the primary deficit is 0.2% of GDP. The nominal GDP is estimated to grow at a rate of 12% in FY 2019-20.

The revenue deficit for the Apr-Nov 2019 period came in at ₹6.23 lakh crore, which is about 129 per cent of the Budget estimate for 2019-20. The fiscal deficit for the April-November 2019 period came in at ₹8.08 lakh crore, which is about 115 per cent of the financial year 2019-20 target of ₹7.04 lakh crore.

Related Terms

  • Financial Sector

    The financial sector is a segment of the economy composed of companies and institutions that provide commercial and retail customers with financial services.   Read more

  • Electronic Payment and Receipts Framework

    Electronic payments and receipts refer to payments and receipts made using digital means or technology.   Read more

  • Law Of One Price

    The Law Of One Price (referred to as LOOP) is an economic theory which states that the price of identical goods in various markets must be the same after taking into consideration the currency exchange, i.   Read more

  • Reasonable Doubt

    Beyond a reasonable doubt is a substantive standard of proof which is required to justify a criminal conviction in most adversarial justice systems.   Read more

  • Labour Force Participation Rate

    The labour force participation rate is the portion of the working population in the 16-64 years' age group in the economy currently in employment or seeking employment.   Read more

  • Supranational

    A supranational entity is an international group or alliance in which member states' power and influence transcend national boundaries or interests to engage in decision-making and to vote on collective body matters.   Read more

Recent Terms