Daily Current Affairs – 28 February 2026

English | Page 8 | Union Budget & Fiscal Policy

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💰 1. Structure of the Union Budget

The Union Budget is broadly divided into:

• Revenue Budget – Revenue receipts and revenue expenditure
• Capital Budget – Capital receipts and capital expenditure

Revenue Expenditure: Salaries, subsidies, interest payments.
Capital Expenditure: Infrastructure creation, asset building, loans.

Prelims Tip: Know the difference between revenue and capital receipts/expenditure.

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📊 2. Fiscal Deficit

Fiscal Deficit = Total Expenditure – Total Revenue (excluding borrowings)

It indicates the extent to which the government relies on borrowing to finance its expenditure.

Key Concepts:

• Primary Deficit
• Revenue Deficit
• Public Debt

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 3. FRBM Act (Fiscal Responsibility and Budget Management Act)

The FRBM Act (2003) aims to ensure fiscal discipline, reduce fiscal deficit and maintain macroeconomic stability.

Mains Angle: Discuss the relevance of FRBM in maintaining fiscal sustainability.

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🏦 4. Fiscal Policy vs Monetary Policy

Fiscal Policy is managed by the Government through taxation and expenditure decisions.
Monetary Policy is managed by the Reserve Bank of India through interest rates and liquidity control.

Coordination: Necessary for controlling inflation while ensuring growth.

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 5. Budget Priorities and Growth

• Infrastructure development
• Green energy investment
• Digital economy expansion
• Rural development initiatives

These priorities aim at long-term structural transformation of the economy.

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 Mains Practice Question

“Critically examine the role of fiscal discipline in ensuring sustainable economic growth in India.” (250 words)

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📘 Fiscal Discipline + Strategic Investment = Sustainable Growth
© 2026 Shaktimatha Learning – Economy Governance Series