India’s fiscal deficit — or the shortfall between the government’s expenditure and its revenue — widened to Rs 4.68 lakh crore in April-July, widening from Rs 2.77 lakh crore in the corresponding period a year ago.Â
A key macroeconomic indicator, fiscal deficit determines how much a government needs to borrow to meet its expenses.Â
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A fiscal deficit indicates the government is spending more money than it is collecting through taxes and other avenues. Typically, the larger is the fiscal gap, the greater is the risk of inflation risks.Â
Meanwhile, separate official data showed that the country’s GDP expanded at a better-than-expected rate of 7.8 per cent in the April-June period, cementing its position as the world’s fastest-growing major economy. Â
