Question

Calculate a)Revenue deficit and b)primary deficit
Tax revenue 47
Capital receipts 34
Non tax revenue 10
Borrowings 32
Revenue expenditure 80
Interest payment 20​

Answer 1

Answer:

Revenue deficit = revenue expenditure - revenue receipts

= revenue expenditure - ( tax revenue - non tax revenue)

= 80 - (47+10) = 80 - 57 = 23

b) Fiscal deficit is equivalent to the borrowings. Therefore, fiscal deficit = 32.

c) Primary deficit = Borrowings - interest payments = 32 - 20 = 12.