Assertion (A): Fiscal deficit is greater than budgetary deficit. Reason (R): Fiscal deficit is the borrowings from the Reserve Bank of India plus other liabilities of the Government to meet its expenditure.

The correct answer is A because both statements are factually accurate and the reason logically explains the assertion.

Assertion A is true because the budgetary deficit only accounts for the gap between total receipts and total expenditure. In contrast, the fiscal deficit is a much broader measure that represents the total borrowing requirements of the government from all sources to bridge that gap. Therefore, fiscal deficit is always a larger figure than the budgetary deficit.

Reason R is true because it correctly defines fiscal deficit. It encompasses not just the money borrowed from the Reserve Bank of India but also all other internal and external liabilities incurred by the government to meet its total expenditure. Since these borrowings are the primary way the government covers its deficit, the definition provided in R directly explains why the fiscal deficit is the more comprehensive and larger figure referred to in A.