Which of the following statements best describes the term "Fiscal Slippage"? |ForumIAS

[A] It refers to the reduction in government spending to control inflation.

[B] It is the failure of a government to meet its fiscal deficit targets, resulting in a higher-than-expected budget deficit.

[C] It refers to an increase in tax collection beyond the projected target.

[D] It denotes the practice of delaying budget presentation due to political reasons.

Answer: B

Notes:

Explanation:

Fiscal Slippage occurs when a government’s actual fiscal performance falls short of its budgeted or targeted figures, particularly in relation to the fiscal deficit. It generally means that the government has spent more than planned or earned less than expected, causing the fiscal deficit to widen. Common causes include farm loan waivers, shortfall in tax revenue (e.g., GST or VAT), and higher subsidies or oil price shocks.

Source– BS

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