Meaning. Fiscal deficit is defined as excess of total expenditure over total receipts excluding borrowings during a fiscal year. In simple words, it is the amount of borrowing the government has to resort to meet its expenses. A large deficit means a large amount of borrowing. Fiscal deficit is a measure of how much the government needs to borrow from the market to meet its expenditure when its revenues are inadequate. In the form of an equation:
Fiscal Deficit = Total Expenditure - Total Receipts excluding Borrowings = Borrowing