Fiscal deficit in the Union Budget means

Fiscal deficit measures the government’s total borrowing requirement and is defined as total expenditure minus total receipts excluding borrowings. It therefore represents the amount the government must finance through borrowings from all sources (domestic and external) rather than being limited to revenue shortfalls or RBI accommodation [1]. Expressed operationally, fiscal deficit equals the budgetary (or budget) deficit plus the net increase in internal and external borrowings—i.e., the extra resources raised from markets and abroad to meet the gap. Several standard explanations of the Union Budget adopt this formulation and list the sum of budgetary deficit and net increase in borrowings as the fiscal deficit.

Sources

1. [1] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > 4.5 Government Deficits > p. 153