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Deficit financing refers to the practice adopted by a government when its expenditure exceeds its revenue, leading to a gap or deficit in the budget. In simpler terms, when the government spends more than what it earns through taxes, fees, and other non-debt receipts, it faces a deficit. To bridge this gap, the government resorts to deficit financing. It is a common tool in public economics, especially for developing countries, where governments often need to mobilize additional resources to finance developmental projects, infrastructure, and welfare schemes. The idea is that such spending stimulates economic growth, even though it temporarily creates an imbalance between income and ________ _______ _____ ________ _________.
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