Fiscal Deficit is nothing but total expenditures exceeding the revenue that a government generates.
In an ideal financial system, which has a balanced fiscal deficit, the cost of expenditure is low while production and growth is advancing. But when there is an increase in fiscal deficit it means that the government is spending too much while it is earning less.
Hence, it is important that the government keeps its expenses under control.
Government deficit or surplus is the difference between government receipts (mainly tax revenue) and government spending (i.e. salaries of government employees, social benefits, interest on the public debt) in a single year.
A deficit occurs when the outlays of a government exceed the inlays; a surplus is when revenues are higher than expenditure. This ratio is usually presented as a percent of gross domestic product (GDP).