What is a budget deficit?
A budget deficit happens when a government spends more money than it earns. This means the government has to borrow money. It’s like when you want to buy something but don’t have enough money, so you ask a friend to borrow some.
For example, imagine you get Rs 100 as pocket money, but you want to buy Rs 150 worth of toys. You will need Rs 50 more to buy the toys. That extra Rs 50 is your deficit!
When the government has a deficit, it borrows money. If this happens for a long time, the country may have a lot of debt. This is a problem because the country may not have enough money for important things like schools, hospitals, and roads.
Argentina ends its budget deficit.
In Argentina, President Javier Milei worked hard to fix the country’s budget deficit. When he became president in December 2023, the country had big problems. Prices were going up quickly, and people were finding it hard to buy things.
To save money, he made some tough choices. He sold some aeroplanes, reduced the number of official cars, and even fired a minister who gave people raises at the wrong time. He also made the government smaller to save money.
One way he made money was by raising bus and train fares. Some people didn’t like this, but many people thought he was doing the right thing to fix the country’s money problems.
What’s the scene in India?
In India, the government is also working on reducing its deficit. This means they are trying to spend less money than they earn. The government wants to reduce the deficit to 4.9% in 2024-25. Last year, it was 5.6%.
This is good because it means the government is trying to be smart with money. They want to borrow less and save more for important things, like schools and hospitals.
