Q.1 Define Revenue Deficit and Fiscal Deficit
Ans: Fiscal Deficit : difference between the total government expenditure and total revenues and non-debt capital receipts.
Revenue Deficit : difference between revenue expenditure and current revenues.
| Source : IGNOU PDF Link : Page Number : 3 |
| Formulas: Revenue Deficit = Total Revenue Expenditure – Total Revenue ReceiptsPrimary deficit= Total revenue – Total expenditure excluding interest payments on its debt.Primary deficit = Fiscal deficit – Interest payment. |
| Extra Info : BUDGET DEFICIT: It is the difference between all receipts and all expenditure (both revenue and capital).PRIMARY DEFICIT: This is equal to fiscal deficit minus interest payments.MONETISED DEFICIT: Important from the policy point of view, monetised deficit tells us the increase in Net RBI Credit to the Central Government. The overall budgetary deficit derived in the budget does not accurately reflect the size of the monetised deficit. The monetised deficit indicates the quantum of additional money created as a consequence of credit extended to governments. |