A Business Encyclopedia

Monetised Deficit

Definition: The Monetised Deficit is the extent to which the RBI helps the central government in its borrowing programme. In other words, monetised deficit means the increase in the net RBI credit to the central government, such that the monetary needs of the government could be met easily.

The monetized deficit results in the increase in the net holdings of treasury bills by the RBI and also the RBI contribution towards the government’s market borrowings increases. With the issue of more money to the government, the money supply in the economy increases, as a result of which the inflationary pressure prevails. Hence, we can say that monetised deficits are the part of a fiscal deficit that leads to the inflation in the economy.

Thus, it can be concluded that monetised deficit occurs when the government takes a monetary support from the RBI to finance its debt obligations and try to reduce its unnecessary expenditures.

Leave a Reply

Your email address will not be published. Required fields are marked *


Related pages

marketing environment micro and macro factorscause of cost push inflationcamel ratingleadership grid pptcash budgetsthematic mutual fundskinds of price elasticity of demanddefinition of queuing theoryrediscounting of billswhat is involuntary unemploymentansoff's matrix definitiondividend policy theoriesparticipative leadership style examplesfranchising definition marketingdegrees of elasticity of demandexample of unitary elastic demandlikert scale descriptorsgeocentric staffingmoral suationdeterminants of the price elasticity of demanddefine liquidatewhat's ethnocentrismrefresher training meaningdefine effective communicatordefinition of reinforcement theorysorting techniques with exampleswhat is slr ratioequipments definitionoperant conditioning meaningarbitrage example currencydefine bookedinterlizationdefine aoarensis likert 4 system of managementdebtor collection period formuladefine stratified sampling in statisticsbusiness process reengineering methodologydiminishing utility definitionjargons meansnet profit margin ratio definitionmarginal costing methodoligopoly markets examplesexample of ethnocentricprofit ratioswhat does purchasing power parity meanexample of product mixwhat does vestibule meannpv break evenreceivables turnover ratio definitionoperant conditioning theory of learningquick acid test ratio formulawhat is meant by collective bargainingsebi definationblake and mouton managerial grid theoryleadership styles autocraticpaired comparison scalingdefinition of denotative languagebureaucracy weber definitionadministrative management theory by henri fayoldelphi method of demand forecastingdagoes definitionmeaning of critical path methoddemand function meaningdemat meaningdefinition of hr metricsobjectives of quality circlespearman rank correlation coefficientsteleological theoriesdefine straddlewhat does the law of diminishing marginal utility stateadjourning stage of group developmentforced distribution performance appraisalstradling definitiondefine captives