The term "budget gap" refers to the difference between a government's or organization's total expenditure and its total revenue. In other words, it is the shortfall in funds that an entity faces when its spending exceeds its income. A budget gap can occur at various levels of government (federal, state/provincial, or local) as well as for private organizations or households. When a budget gap exists, it may require the implementation of measures such as cutting expenditure, increasing revenue, or borrowing to bridge the financial deficit and ensure that essential services are maintained.