Budget deficit is the amount by which total expenditure exceeds revenue.
A budget is a financial plan that outlines the expected revenue and expenditure of a government or organization over a specific period of time. A budget deficit occurs when the total expenditure of the government or organization is higher than its total revenue.
Total expenditure includes both recurrent expenditure, which is the regular, ongoing expenditure such as salaries, wages, and interest payments, as well as capital expenditure, which is spending on assets such as infrastructure, buildings, and equipment.
Revenue refers to the money received by the government or organization, such as taxes, fees, and grants. When revenue is less than total expenditure, it results in a budget deficit.
Budget deficits can have significant implications for the economy, such as an increase in government debt, inflation, and a decrease in confidence from investors. In contrast, a budget surplus occurs when revenue exceeds total expenditure, which can help to reduce government debt and increase confidence from investors.
In summary, a budget deficit occurs when total expenditure exceeds revenue, which can have significant implications for the economy and government finances.