Gross fiscal deficit equals total expenditure minus

1. Fiscal deficit measures what the government must borrow. 2. So borrowings themselves are excluded from the receipts side. 3. Gross fiscal deficit = total expenditure - (**revenue receipts + non-debt creating capital receipts**). 4. Including borrowings on the receipts side would make the deficit vanish by definition, which is the error the fourth option invites. _Source: syllabus Introductory Macroeconomics, Ch 5 "Government Budget and the Economy", section 5.2.1 Measures of Government Deficit_