Deficit Financing: What is Deficit Financing?

Deficit Financing – It is a practice resorted to by modern government of spending more money than it receives in revenue. It is a policy of bridging a deficit between governments expenditure and revenue. Deliberately budgeting for a deficit is called deficit financing. This practice was popularized by Prof. J. M. Keynes to deal with the depression and unemployment situations and to stimulate economic activity. Deficit financing, though having inflationary effects, has now become a common practice in all countries.

4 thoughts on “Deficit Financing: What is Deficit Financing?

  1. Pandeykiran2007 says:

    thanks admin its fruitful infrmn

  2. Saket Gurudev says:

     in it government take lone from IMF  or  RBI

  3. For spending more money then revenue, from where do they get the money from?….Do the govt borrow money from RBI or IMF?…What is the advantage of deficit financing? Please elaborate.

  4. wont it create more burden to common people? kindly show the data if you have it will depict the whole scenario.

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