Budget in A Minute: Fiscal Deficit in Union Budget explained here by Zee Business Managing Editor Anil Singhvi

Budget in A Minute: After explaining the meaning of Union Budget, Zee Business Managing Editor Wondering today explained what Fiscal Deficit is. The Market Guru is educating the channel viewers about the most talked about aspects of the budget, yet many do not know about them. His explanations are short and simple and can be understood in just one minute.

In the budget speech of the Finance Minister, the first thing that comes is Fiscal Deficit and it is one of the most crucial numbers that is spelt out in a Budget, Singhvi said. Everybody has a keen eye on this data in the budget.

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What is Fiscal Deficit?

The Central Government generates revenues through tax collections and various sources. But its expenditure exceeds its revenues. So there is a gap between its earnings and expenditure. This gap is known as the Fiscal Deficit.

The government manages this gap through borrowings, through foreign investors or through the issuance of bonds and securities.

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1 मिनट में अनिल सिंघवी से समझिए क्या होता है वित्तीय घाटा (Fiscal Deficit)?#BudgetOnZee #Budget2021 #UnionBudget2021 @AnilSinghvi_ pic.twitter.com/A7S0cjZ253

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What is the problem with Fiscal Deficit?

There is nothing wrong with having a fiscal deficit and every government prepares a budget that reflects this deficit. But this has to be in limits. For instance, the Finance Minister (FM) during the Budget 2020 said that the Fiscal Deficit will be 3.3 per cent of the Gross Domestic Product (GDP) of India. If the deficit is near this Government Estimates, then it will be alright, but if it's off the mark in a big way then the markets will not like that, Singhvi said.

The first thing that the markets react on at the time of Budget presentation is the Fiscal Deficit. They may go up or down depending upon this number. Even in Budget 2021, the investors should keep an eye on this.

Finance Minister Nirmala Sitharaman will be presenting the Budget 2021 on 1 February.