Governments are societal institutions to provide public goods and services like defence, law and order, justice, currency, macro-economic stability, and merit goods like health, education, and nutrition. Governments pay for providing these services by raising taxes from the people. In an ideal state of affairs, such expenditures should be fully met from the taxes leaving no fiscal deficit.
The governments, however, have ventured majorly in expanding welfare providing financial and in-kind support to the poor and vulnerable eg, free/subsidised food and fertilisers, and carrying on businesses eg, making steel and providing telephone services. These expenditures, almost more often than not, are funded by raising borrowings, which creates and makes fiscal deficit shoot up.