Budget Deficit
Deficit & Surplus Intermediateबजट घाटा
Definition
Budget deficit is the difference between total estimated expenditure and total estimated revenue including borrowings. In modern Indian budgeting, this concept has been largely replaced by fiscal deficit as the primary measure. Budget deficit was discontinued as an official measure from 1997-98 when India adopted fiscal deficit as the key indicator under fiscal reform.
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Why Budget Deficit Matters
Understanding budget deficit is essential for anyone following government finances, preparing for competitive exams, or analysing India's economic policy. This concept directly affects how the government allocates resources and plans its fiscal strategy.
In the context of India's Union Budget 2026-27, with a total size of Rs 53.47 lakh crore, terms like budget deficit help citizens and analysts evaluate whether the government is on the right fiscal path. The numbers in the budget are only meaningful when one understands the underlying concepts.
For UPSC aspirants, budget deficit is frequently tested in both Prelims and Mains, particularly in Paper III (Economic Development). For CA and MBA students, this concept appears in public finance and macroeconomics courses.
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